FTSE boosted by miners and Aviva

Mining stocks and Norwich Union insurer Aviva cheered the London market today as investors came to terms with a rise in the annual rate of inflation for the fourth straight month.

The FTSE 100 Index rallied after a strong session in New York to stand 10.3 points ahead at 5296.8 by mid-morning.

The mining sector continued its recovery after heavy losses on Friday, with Rio Tinto, Xstrata, BHP Billiton and Antofagasta all in the top five of the blue chip leaders board.

Rio Tinto was up 3% to 2250p, while Xstrata, BHP and Antofagasta were up just under 2% to 1375p, 832p, and 1494p respectively.

But the biggest mover of the morning was Aviva, which said its RAC business should generate annual pre-tax profits of up to £250m (€365.3m) by 2008.

After setting out “ambitious growth plans” for the recently-acquired business, shares in the insurer gained by more than 3% or 19.5p to 641.5p.

It helped a number of other stocks in the sector, including Royal & Sun Alliance, which added 1.5p to 96p, and Legal & General which cheered 1.25p to 107p.

Oil stocks Cairn Energy and Royal Dutch Shell were also in positive territory, up 12p to 1721p and 16p to 1835p respectively, although the giant of the sector BP fell off 3p to 626.5p.

Investors showed interest in high street store Next after Morgan Stanley upgraded it. The broker said the stock looked cheap after a fall of 33% relative to Marks & Spencer, lifting shares in the retailer 9p to 1311p. M&S, however, fell 2.25p to 394.75p.

Elsewhere, gambling stocks continued to fluctuate after a warning from Empire Online that full-year profits would be 10% lower than expectations. The second-tier stock fell 4% or 3.5p to 94.5p, while PartyPoker owner PartyGaming held its price of 79.5p in the top flight.