FTSE begins to recoup losses as miners and banks advance

BRITAIN’S top share index rose yesterday, boosted by a rebound in commodity stocks and helped by better-than-expected economic data from the US.

The FTSE 100 closed up 46.44 points, or 0.9 per cent, at 5,155.84, as London’s blue chips rallied from a seven-week closing low on Wednesday.

Weekly jobless claims in the United States declined more than expected to a seasonally adjusted 473,000 in the latest week, well below market expectations for a drop to 490,000.

“The weekly unemployment claims are just giving an excuse for this market to have a bit of a technical bounce. I don’t really think there is much more in it than that,” said David Morrison, market strategist at GFT Global.

Kazakh copper miner Kazakhmys was the top FTSE 100 riser, up 5.2 per cent after it reported a 130 per cent rise in underlying first-half earnings per share and said it was on track to meet its full-year output goals.

Gold and silver prices steadied, but remained near recent highs after the US data, with precious metal miner Fresnillo a big riser, up 4.8 per cent.

Sector peers rallied after taking a mauling on Wednesday, along with metals prices, from gloomy reports on US housing and durable goods orders.

Xstrata was up 2.4 per cent after major shareholder Glencore International, the Swiss mining and commodities trading giant, posted robust first-half results on strong metals prices.

BHP Billiton climbed 2.0 per cent as its chief executive flies to North America this week to crank up the charm offensive with Potash Corp shareholders after dousing expectations he would sweeten a $39bn bid for the fertiliser giant.

Energy
stocks also recovered after falls in the previous session, rising with crude prices.

Oil services and engineering group Amec added 5.1 per cent after it posted a 20 per cent jump in profits.

Banks also bounced, with Germany’s economy continuing to set the pace in the euro zone. Bank lending in the bloc is also showing signs of revival, data showed, but Spain and Italy face a harder road to recovery.
G4S rose 2.8 per cent after the security services group reported a rise in first-half profit thanks to strong performance at its Asia and Middle East businesses, and said it expected more growth in the second half.

Segro topped the FTSE 100 fallers’ list, down 3.8 per cent, after the industrial property landlord reported first-half results and only a small rise in asset value per share. Evolution Securities cut its rating to “neutral” from “add”, saying there was “no catalyst for equity outperformance”.

Investors were awaiting economic data out today, including second-quarter GDP estimates in the UK and a speech from US Federal Reserve Chairman Ben Bernanke for clues on whether the Fed will support the economy with fresh injections of cash in the coming months.