hares reversed early losses yesterday, helped by the completion of the long-awaited takeover of miner Xstrata by commodities trader Glencore which boosted both stocks.
Xstrata led the risers, adding 3.1 per cent, after its shareholders approved the $31bn deal which had been on the cards ever since Glencore listed last year.
Mining stocks, which were down 0.5 per cent at their session low at 2.45pm, rebounded to finish 0.5 per cent up following the news.
“We consider the long-term investment case for the merged Glencore Xstrata to be compelling,” analysts at Jefferies said in a note, reiterating their buy recommendation on both stocks. Glencore gained 1.6 per cent, with both stocks trading over double their average 90-day volume.
At the close, Britain’s FTSE 100 was up 10.44, or 0.2 per cent, at 5,748.10, despite hitting an intraday low of 5,706.70 in morning trading.
While the materials sector was supported by Xstrata and Glencore, other main gainers were defensive sectors.
Telecoms led sectoral risers, pulled up by heavyweight Vodafone, which rose 1.1 per cent. It added 3.5 points to the index, the most by a single contributor.
“It’s got an eight per cent yield, and the fact that it’s one of the outperformers today I think is quite telling, that people are starting to feel comfortable with it again,” Nick Xanders, head of European equity strategy at brokerage BTIG, said.
The stock had lost 18.8 per cent in three months between the middle of August and the middle of November.