CYCLICALS lifted Britain’s top shares above 5,800 points for the first time since May yesterday as investors bet on eventual European Central Bank action to curb high peripheral bond yields, although low volumes showed not everyone was convinced.
The FTSE 100 extended gains from last week, helped by strong performances in mining and energy, although uncertainty over the detail and timing of any ECB action kept some on the sidelines, adding to the thin seasonal trade.
“We have come up so far and so fast on no real progress. I am very cautious about going all in in this revival in the market. Everything depends on the European authorities and in particular Mario Draghi following through with promises,” said Charles Stanley analyst Jeremy Batstone-Carr.
The FTSE 100 ended up 21.49 points, or 0.4 per cent, at 5,808.77 after hitting its highest point since early April in intraday trade before coming off slightly into the close. Volume remained weak at 71 percent of its 90-day daily average.
Heavyweight mining and energy stocks were among the session’s best performers adding 13.5 points to the index.
Rio Tinto, up 2.6 per cent, added most points to the index, closely followed by BG Group, up 1.8 per cent.
While gains for heavyweight mining firms helped the pan-European STOXX Europe 600 Basic Resources index add 1.3 per cent by the close, it still remains the worst performing sectoral index in the year to date, down 2.4 per cent.
Marks and Spencer was among the top gainers, based on speculation it could become a bid target.