BRITAIN’S top share index ended higher yesterday after slipping to a five-month low earlier in the session, with a strong bounce in miners and a rally in US equities helping the broader market.
The blue-chip FTSE 100 index finished 0.4 per cent higher at 6,707.88 points. It earlier fell to 6,625.16, its lowest since late January, as some companies traded without the attraction of their latest dividend payouts.
The index recovered after US equities rose 1.1 to 1.3 per cent, a day after the US Federal Reserve indicated the pace of any rate hikes would be slower than expected.
Miners were the top gainers, with the sector index rising 1.8 per cent, after copper climbed on upbeat Chinese data and a weaker dollar. A fall in the US currency also helped gold prices.
“A rally in metals prices on the back of a softer dollar has helped the FTSE 100 to recover from earlier lows. The index is technically ‘oversold’ and a bounce back is due,” Securequity trader Jawaid Afsar said.
Shares in Anglo American, Fresnillo, Randgold Resources and BHP Billiton rose between 2.1 and 2.7 per cent.
Despite the late recovery, investors stayed cautious. Concerns over the Greek debt crisis have hit shares, although the FTSE 100 outperformed the pan-European FTSEurofirst 300 index, up about 10 per cent this year.
The FTSE 100 is up about two per cent year to date as it has not felt the full benefit of monetary easing in the Eurozone and has been hindered by a heavy weighting in commodity stocks as prices have come under pressure.
Yesterday’s gains were capped by falls of 0.4, 2.9 and 3.1 per cent respectively in shares of Land Securities Severn Trent and 3i Group as they traded ex-dividend.
The FTSE 250, down 0.2 per cent, underperformed the FTSE 100 as the mid-cap index was hit by disappointing updates.
Poundland fell 3.5 per cent after the discount retailer said first-quarter growth had slowed and first-half trading would be subdued.
Premier Farnell, a distributor of small electronics and parts, dropped 5.5 per cent after saying first-half adjusted operating profit would be marginally below last year’s figure as it works to implement a new global structure.
While online gaming company Playtech said trading was strong, it fell 0.9 per cent after saying it would raise £250m through a share placing.