Strong miners give FTSE a boost

STRENGTH in heavyweight mining stocks helped Britain’s top share index edge higher yesterday, countering slippage by banks on Eurozone debt concerns.

At the close, the FTSE 100 was up 10.9 points, or 0.2 per cent at 5,880.99, well below a morning spike above the psychologically important 5,900 level to 5,910.77.

“The overall impression ... is that traders are highly anxious about the sovereign debt situation and, given that there is no quick fix for this situation, this anxiety could persist throughout the summer, thereby keeping equities in check for an extended period,” said Charles Stanley technical analyst Bill Macnamara.

Miners provided the main prop for the FTSE 100 as investors returned to the sector on hopes of a reverse of the flow of funds “largely out of mining and other stocks” in the recent IPO of commodities trader Glencore.

Antofagasta was a top blue chip gainer, up 3.5 per cent, as the Chilean copper miner posted a 30 per cent rise in quarterly core earnings, helped by higher prices.

Tobacco stocks were also in demand, led by a 1.3 per cent rise in British American Tobacco which agreed to buy privately owned Productora Tabacalera de Colombia, the second largest cigarette company in Colombia, for $452m.

Banks were the worst blue chip performers, with part-nationalised Royal Bank of Scotland shedding 1.1 per cent and global heavyweight HSBC down 0.4 per cent as worries over Eurozone sovereign debt failed to dissipate.

Concerns about Greek fiscal woes were reignited after Eurogroup President Jean-Claude Juncker said if payment of the IMF tranche to Greece in June was not possible, the Europeans were expected by the IMF to step in.

Lloyds Banking Group, however, bucked the weaker sector trend, up 1.1 per cent as Virgin Money stepped up its bid interest in 600 retail branches which the British bank has been ordered to sell by regulators. By London’s close, US blue chips were down 0.4 per cent on the renewed Eurozone worries and as the US economy grew at a slower-than-expected pace in the first-quarter, with GDP unrevised at up 1.8 per cent.