FTSEcloses at one-year high as energy and mining rally

RALLYING energy stocks and miners, spurred by firmer commodity prices and growing optimism on the corporate outlook and global economy, helped the top share index to its highest close in over a year yesterday.<br /><br />Global equity markets were given a shot in the arm by forecast-beating results from <strong>Philips</strong> ahead of earnings from other major companies due later in the week.<br /><br />&ldquo;There&rsquo;s a degree of optimism on the earnings season and Philips and it has been the main driver attributed to the rally today,&rdquo; said Angus Campbell, at Capital Spreads.<br /><br />The FTSE 100 index closed up 48.30 points, or 0.9 per cent, at 5,210.17, its highest close since September 2008 when the market tumbled following the demise of Lehman Brothers.<br /><br />But volumes were thin as US bond markets and government departments were closed for the Columbus Day holiday.<br /><br />Energy stocks added the most points to the index as crude oil prices rose above $73 a barrel, with <strong>BP, Royal Dutch Shell </strong>and <strong>BG Group</strong> up 1 per cent to 2.3 per cent.<br /><br />Investors keenly await results from US companies including <strong>Intel, JPMorgan Chase</strong> and <strong>Citigroup</strong>, hoping for further evidence the global economy was on a firm path to recovery.<br /><br />Firmer metals prices, helped to lift miners. <strong>Fresnillo, Kazakhmys, Eurasian Natural Resources, Rio Tinto </strong>and Xstrata added 1.5-2.2 per cent.<br /><br /><strong>Old Mutual</strong> was the top FTSE 100 gainer, up 4.6 per cent to a 16-month high, as analysts said it was trading at a discount to embedded value, a gap which should narrow in a rising market.<br /><br />Other insurers were also higher with <strong>Aviva, Prudential</strong> and <strong>Standard Life </strong>up 0.5-2.3 per cent.<br /><br />Elsewhere among financials, some banks were up with heavyweight <strong>HSBC</strong> up 0.2 per cent and <strong>Standard Chartered</strong> gaining 2 per cent.<br /><br />But <strong>Lloyds Banking Group</strong> shed 2.5 per cent, topping the list of fallers, after a source familiar with the matter said the bank had lined up six investment banks to underwrite a rights issue worth more than &pound;10bn. <br /><br /><strong>Barclays</strong> was down 1.2 per cent amid reports the lender was planning to spin off a &pound;4bn. portfolio of complex credit assets as it pressed ahead with a process to clean up its balance sheet. <br /><br /><strong>Royal Bank of Scotland </strong>was down 0.5 per cent.<br /><br /><strong>Burberry</strong> was another healthy riser, climbing 2.2 per cent ahead of second-quarter earnings from the luxury clothing brand on 14 October, with Deutsche Bank saying the company was well positioned for 2010 as it lifted its target price.<br /><br />Defensive utilities were the main drag on the index. <strong>Centrica</strong> was off 0.4 per cent and <strong>National Grid</strong> was 0.3 per cent weaker.<br /><br />Prime Minister Gordon Brown gave a boost to the markets yesterday when he gave his backing to central bank theBank of England&rsquo;s programme of pumping money into the economy to help pull Britain out of recession.