FTSE hits a five month closing high, led by banks, miners and oil stocks

STRONGER banking and commodity shares helped drive Britain’s top share index to a more than five-month closing high yesterday, after encouraging US economic data gave a boost to markets.

The FTSE 100 closed 79.79 points, or 1.4 per cent, higher at 5,635.76, its highest closing level since 26 April, after a 0.7 per cent fall on Monday.

Banks were the best performing blue chips, adding 2.5 per cent, as the sector rallied from falls last week on fresh European debt concerns.

The pace of growth in the US services sector accelerated last month more quickly than economists had expected and hiring also picked up, according to a report from the Institute for Supply Management.

“The market always appears to be waiting for the next bit of data, but the picture that is building here, for me, is one where the recovery remains on track, albeit it has had its fair share of wobbles,” said Paul Kavanagh, a partner at broker Killik & Co.

Strong demand was also seen for miners, up 2.7 per cent, as copper hit new 26-month peaks, the euro rose against the dollar and after Japan unexpectedly lowered interest rates, raising expectations of further boosts for other major economies.

It was a similar story with energy stocks, which put on 0.8 per cent, as crude prices rose, with BG Group, up 1.3 per cent, the best performing integrated oil stock.

Anglo American led the miners higher, rising 4.1 per cent, followed by Antofagasta, 3.7 per cent firmer.

Kazakhmys did not fare so well, adding only 0.3 per cent, after its chairman Vladimir Kim sold around an 11 per cent stake in the company to the Kazakh National Welfare Fund, reducing his holding to 27.9 per cent.