BRITAIN’S top share index nosed ahead yesterday to close above 5,700 points for the first time since the end of October 2011, as strength in heavyweight miners and banks countered falls in integrated oils.
The FTSE 100 ended the day up 8.42 points, or 0.2 per cent, at 5,702.37, just below the intra-day peak of 5,709.87, having bounced off a session low of 5,647.92 in a choppy session.
Volume was just under 90 per cent of the 90-day average.
Risk-sensitive miners and banks led the gainers, helped by hopes the International Monetary Fund (IMF) will bolster its lending resources to help economies hit by Europe's debt crisis.
There was also relief in the Eurozone after Germany saw good demand, and yields fall, at its most recent debt auction, while borrowing costs fell for debt-laden Portugal at a bond sale.
But news the World Bank had revised down its forecasts for global growth held enthusiasm in check.
Better-than-expected results from Goldman Sachs also helped the banks find some relief after Citigroup’s earnings disappointed in the previous session.
A trio of UK blue chips rebounded after recent sharp falls.
Essar Energy was the top gainer, up 7.2 per cent and recouping some of the previous session’s sharp falls after saying it expects to challenge a ruling by India’s Supreme Court over deferring payment of a sales tax.
Under-pressure hedge fund manager Man Group added 6.8 per cent after it reported a slowing in the pace of outflows from its funds.
And Carnival, owner of the capsized cruise ship Costa Concordia, recovered 3.3 per cent after being sold off sharply on Monday.
“The contrarians are feeling at least a little vindicated today, as Essar Energy, Man Group, and Carnival lead the FTSE 100 into the close,” said David White, Trader at Spreadex.
“All three companies have suffered dramatic selling on the open market, becoming the subject of debate for bargain hunters. Man Group and Essar have more than halved in value according to market cap in just the last 12 months,” White added.
Oil explorer Tullow Oil was a top FTSE 100 faller, down 4.2 per cent after flagging a production decline, with net asset values likely to fall as a result, according to Oriel Securities.
However, Oriel said the focus for Tullow should remain on its active exploration and appraisal programme which looks busy in 2012, and the broker retained an “add” rating on the stock.
Falls by integrated oils was the biggest drag as crude consolidated at $100 a barrel.
Broker downgrades also weighed.
Rolls-Royce shed 1.8 per cent after JP Morgan Cazenove downgraded the stock to “neutral” from “overweight”, citing limited upside to the current valuation and mounting headwinds.
And BT Group fell 0.9 per cent as UBS downgraded the telecoms firm to “neutral” from “buy”, citing concerns over valuation, competition and the firm's pension.
Imperial Tobacco was the biggest loser, down 4.8 per cent, with the cigarette maker the only blue chip to trade ex-dividend yesterday, clipping 2.63 points off the index.