BRITAIN’S top shares closed 1.2 per cent higher yesterday, as miners and oil firms rose, underpinned by firmer commodity prices on the back of bullish economic data, while RBS fell as the lender faces asset sales.
The FTSE 100 closed 59.95 points higher at 5,104.50 points, recouping some losses from Friday’s 1.8 per cent fall.
The index was down 1.7 per cent overall in October, the first monthly drop since June, but is still up about 48 per cent since its March low.
Miners were supported by strong manufacturing data from the United States and China which reinforced the view that a recovery in demand was under way.
Eurasian Natural Resources, Vedanta Resources, Lonmin and Rio Tinto rose 4.5 to 5.5 per cent.
Rising to the top of the gainers list, Randgold Resources added 6 per cent after it agreed with AngloGold Ashanti to buy an additional 20 per cent in the Moto gold project in the Democratic Republic of Congo for about $113.6m.
Equities drew strength from data showing the US manufacturing sector grew in October for a third consecutive month and at a faster pace than expected.
In the UK the CIPS/Markit purchasing managers index of manufacturing activity rose at its fastest rate in two years and new orders rose at their fastest in almost six years.
Meanwhile, HSBC’s China Purchasing Managers’ Index rose to an 18-month high in October of 55.4, pointing to sustained strength in the fast-growing manufacturing sector.
Analysts say the market will focus on the Bank of England’s next policy meeting on Thursday, with two-thirds of economists expecting the central bank to extend its £175bn quantitative easing programme.
Oil majors edged up as crude prices rose above $78 a barrel. BG Group, BP and Royal Dutch Shell added 0.3 to 1.9 per cent.
Royal Bank of Scotland fell 7.8 per cent after the part-nationalised lender said talks with the European Commission over its state aid will include some divestments not initially contemplated. Lloyds Banking Group also part-owned by the government, was off 2.3 per cent as investors awaited developments with regards to a planned capital raising. Barclays rose 2.5 per cent, while HSBC was up 2.4 per cent .