THE LONDON REPORT
BRITAIN’S top share index hit its highest closing level in more than two weeks yesterday as the G20’s pledge to keep stimulus in place bolstered investors’ risk appetite, with miners and oil stocks leading the charge.
The FTSE 100 closed up 92.46 points, or 1.8 per cent, at 5,235.18, the highest close since 23 October, and notching up its biggest one-day percentage gain since 14 October.
“Wall Street is producing a great lead and we’ve had a very strong message from central banks that rates are staying where they are for quite some time, and meanwhile the global economy is recovering,” said Mike Lenhoff, a strategist at Brewin Dolphin.
Miners added the most points to the index against a backdrop of firmer metals prices, with Kazakhmys, Vedanta Resources, Xstrata, Antofagasta and Rio Tinto adding between 4.3 and 6 per cent.
Randgold Resources put on 4 per cent as gold hit a fresh lifetime high as the dollar retreated on expectations of continued ample money supply and low US interest rates after the Group of 20 (G20) meeting over the weekend.
G20 finance ministers and central bankers pledged on Saturday to prepare strategies to end emergency support for their economies but to keep the aid flowing until recovery was assured.
The news gave banks a shot in the arm, with the sector also getting a boost ahead of third-quarter trading statements from HSBC and Barclays, which rose 1.3 and 1.9 per cent, respectively.
Lloyds Banking Group gained 0.5 per cent, Royal Bank of Scotland added 6.3 per cent and Standard Chartered was 0.8 per cent firmer.
Energy stocks drew strength from a 3 per cent rise in crude prices BG Group, BP, Royal Dutch Shell and Tullow Oil added 0.8 to 2.8 per cent.
Life insurers were also in demand, as takeover speculation swept through the sector after Europe’s second-largest insurer AXA unveiled a planned $7bn buy-out of its Asian assets and the sale of its Australian assets to local rival AMP.
The sector was also helped by ING, which raised its price targets on European insurers, and forecast-beating results from Germany’s Allianz.
Prudential was the biggest gainer in the sector.