Miners fuel FTSE gains

The FTSE 100 continued where it left off in the last session with a moderate rally fuelled by positive data from the US.

US weekly jobless claims fell to a three-year low suggesting that its economic recovery was still on track.

But markets still remain braced for credit rating downgrades for Eurozone countries as agencies judge that last week's European Union summit failed to lay the ground for a quick resolution to the crisis.

Fitch downgraded the credit ratings for another seven banks yesterday including Britain's Barclays, Goldman Sachs, and Deutsche Bank.

Meanwhile a spat was developing as France suggested Britain's credit rating should be under threat because of its grim debt and growth figures.

Miners led London's blue chip index up as metal prices rose. The lift also came as analysts from Liberum Capital gave an upbeat outlook for the sector.

Kazakhmys, Antofagasta and Xstrata were all up more than three per cent. In the same sector Rio Tinto lifted by 2.3 per cent.

Liberum Capital, in a 2012 sector preview, pointed out that, with the exception of commodities trader Glencore the Big Five miners have "silently" re-rated in recent months, while earnings downgrades loom.

Nevertheless, the broker says value remains apparent, adding that it favours Glencore, BHP Billiton and Anglo American, on all of which it has "buy" ratings.

Integrated oils were also higher as crude prices ticked up after recent falls.

BP added 0.3 percent. Cameron International has agreed to pay $250 million to BP in return for the oil major indemnifying the U.S. company against current and future compensatory claims associated with the Gulf of Mexico Deepwater Horizon oil spill incident in 2010.

In financial services fund manager Ashmore was the biggest gainer, rising by 2.3 per cent.

Barclays was up 0.5 per cent despite the Fitch downgrade, while Lloyds rose 0.4 per cent. Meanwhile RBS nudged up by almost one per cent.

Among stocks to fall hedge fund manager Man Group was the main loser, down 1.6 per cent.

BskyB dipped by 1.2 per cent and drinks giant Diageo 0.3 per cent.

On the FTSE All-share Blacks Leisure plunged by more than 30 per cent after Sports Direct announced that it had ditched plans to bid for the struggling company.

In Asia the Nikkei closed up 0.2 per cent and the Hang Seng 1.4 per cent.

Across the Atlantic later US consumer inflation numbers are due for release as investors look for more evidence that the pivotal country in the global economy is on the recovery path.