FTSE closes above 5,000 led by miners who now may not face Aussie tax hikes

BRITAIN’S top share index recovered to close above 5,000 points yesterday, led by miners after reports the Australian government may relax punitive tax measures, while Burberry jumped after strong earnings.

The FTSE 100 ended up 97.40 points or 2 per cent at 5,038.08, having tumbled 2.5 per cent on Tuesday to its lowest close since September.

“The positive moves ... certainly helped us breathe a sigh of relief that there remains some form of confidence out there,” said Nick Serff, market analyst at City Index said.

Gains in miners were upheld after The Australian newspaper reported on its website that the government there was planning to redefine its proposed super-profits levy.

Global miners such as Rio Tinto and BHP Billiton have been weighed by concerns other nations could follow Australia’s lead by introducing a windfall tax on mining profits.

Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and BHP Billiton added as much as 7.3 per cent, also gaining in tandem with firmer metal prices as investor pessimism over demand eased.

“We need to see investors continue to build on these new positions before the market can afford to relax some more,” Serff added.

Burberry topped the blue chip risers chart, up 7.6 per cent after the luxury goods group beat forecasts with a 23 per cent rise in annual profit and said it was stepping up its expansion.

BP reversed early losses, up 1.4 per cent with traders citing market talk that the oil major may give some positive news on its effort to contain an oil spill in the Gulf of Mexico.

The firm said it had not taken any decision on whether to try to plug the ruptured well with heavy fluids, the so-called “top kill” procedure.