The FTSE 100 Index held firm today despite pressure on mining stocks caused by a rebound for the beleaguered US dollar.
A signal from Federal Reserve chairman Ben Bernanke that more quantitative easing was on the cards dealt a fresh blow to the greenback on Friday, leaving it at a nine-month low against the pound.
However, a modest recovery caused oil and gold prices to fall back and left mining stocks down by around 2%. The FTSE 100 Index, which initially fell by around 30 points, benefited from a solid session for banks to stand 10.9 points higher at 5714.3.
IG Index sales trader Will Hedden said events later in the week were likely to test the London market’s recent strength.
He added: “After bursting through 5750 temporarily last week, and the subsequent sell-off on Thursday and Friday, it will be interesting to see whether the FTSE 100 can sustain the strong sentiment seen recently, especially with the all-important spending review in store midweek.
Platinum firm Lonmin featured on the fallers board with a drop of 28p to 1803p, while a fall in copper prices and a downgrade from HSBC meant Xstrata eased 28p to 1283.5p and Antofagasta dipped 28p to 1279p.
Miners Rio Tinto and BHP Billiton were also weak after plans for an iron ore joint venture in western Australia were called off in the face of opposition from regulators in Australia, Europe and Asia.
The setback had been expected by investors, limiting the decline in the two share prices as BHP fell 32.5p to 2167p and Rio Tinto dropped 80p to 4063p.
Lloyds Banking Group neared the top of the risers board with a gain of 1.4p to 71.6p after Goldman Sachs increased its target price for the stock.
BT also continued to rise after a statement on Friday allayed fears about the telecom firm’s exposure to government spending cuts. The group, which is one of Whitehall’s largest suppliers of IT network services, has signed an agreement that means all of its contracts remain in place.
Shares rose another 2% or 2.7p to 150.1p today.
In corporate news, Vertu Motors rose 9% after it posted a rise in first-half profits and said it was trading ahead of expectations after a strong new car performance in the key trading month of September. Shares were 2.5p higher at 30.5p.