Miners push FTSE higher but M&S weighs on retail shares

BRITAIN’S top shares added 0.1 percent yesterday as a rally by heavyweight miners, in tandem with stronger metal prices, offset weakness in energy issues, with retailers upset by a disappointing update from M&S.

At the close, the FTSE 100 index was 7.54 points higher at 5,530.04, another 16-month closing high.

“It looks like the big snowstorm has settled on the markets with investors hardly able to see where to go. Weak oils and an uncertain start on Wall Street were outweighed by rallies from miners and banks,” said Mic Mills, a senior trader at ETX Capital.

“But overall interest is fairly frozen ahead of today’s Bank of England rate decision and tomorrow’s US jobs reports”.

Miners were the main prop for the blue chip index’s gains as metal prices firmed. Copper hit a 16-month high as recent data from China and the United States lifted the demand outlook.

Rio Tinto, Kazakhmys, Xstrata, Vedanta Resources, Randgold Resources, and Antofagasta added 1.8 to 3.4 percent.

Banks also moved higher led by Royal Bank of Scotland, up 3.6 per cent, while Lloyds Banking Group, Barclays, and HSBC gained 0.5 to 3.0 per cent.

Life insurers found support, with RSA Insurance, Aviva, and Prudential up 0.6 to 2.9 per cent.

Telecom issues gained, with BT Group up 2.1 per cent, while Cable & Wireless took on 1.9 per cent aided by a Credit Suisse upgrade to “neutral”.

Among individual gainers, Autonomy Corp was the top FTSE 100 riser, up 6.1 per cent after the software firm said it expected to report in-line 2009 results and saw strong cash collection in the fourth quarter.

Plumbing supplies firm Wolseley, up 4.7 per cent benefited from upbeat comments on the British building supplies market from Irish firm Grafton, and hopes for a boost from the British government's boiler scrappage scheme.

US blue chips were up 0.1 per cent by London’s close as investors assessed some slightly below-forecast data.

The Institute for Supply Management non-manufacturing index rose to 50.1 in December, showing expansion, but was slightly below the 50.5 forecast by economists.

The ADP Employer Services report showed U.S. private employers shed 84,000 jobs in December, less than a revised 145,000 in November but more than the 73,000 forecast.

Marks & Spencer was the biggest blue chip faller in London, down 6.8 per cent after its first rise in quarterly underlying sales for more than two years missed analysts’ forecasts and it joined rivals in warning of an uncertain 2010.

Elsewhere in the general retail sector, Home Retail and Kingfisher lost 2.2 and 1.5 per cent, respectively.

Food retailers were also lower. Sainsbury, which releases a trading update today, lost 0.6 per cent, while Tesco shed 2 per cent.