Mining stocks keep FTSE up

Optimism in the commodities markets kept London stocks firmly in the black today.

Shares in miners BHP Billiton and Rio Tinto both reached their highest mark since the millennium as investors continued to take a positive view of global demand for metals.

With investors also showing interest in the UK shares of newly unified oil giant Royal Dutch Shell, the FTSE 100 Index advanced 13.1 points to 5228.3 by mid-morning.

BHP Billiton added 9p to 781p in the wake of yesterday’s statement from Rio Tinto – up 24p to 1862p – that demand for metals remained strong and most of its operations were producing close to capacity. Rival miner Anglo American was at the top of the Footsie with a 42p gain to 1380p.

Oil giant Royal Dutch Shell was back in favour with investors after being heavily sold yesterday, with its “B” shares ahead by 0.5p at 1807p. However, shares originating from the Dutch side of the operation fell 8p to 1758.5p.

On the economic front, upbeat official retail sales figures dampened hopes for a string of interest rate cuts, although analysts said an August reduction remained on the cards.

Corporate updates were clustered in the retail sector where Boots rose 6.5p to 619.5p despite posting a 0.8% decline in same-store sales at its Boots the Chemists outlets.

Dixons recovered early losses to stand 0.75p up at 159.75p, although investors had speculated that it could be suffering the same problems as rival Kesa, which told investors today that sales at its Comet chain had worsened. Kesa weakened 4.5p at 263.5p in the FTSE 250 Index.

But a bright spot in the sector was second-tier furniture retailer MFI – up 4% or 5p to 120.25p – after it offered hope that its supply chain troubles were over and its interim profits fell by less than expected by the City.

Shares in JD Sports owner John David Group were unchanged at 222p after it said it managed to grow sales over the past month despite slowing spending and the impact of the London bombings.