The FTSE 100 Index powered back towards the 6100 mark today with gains that nearly wiped out some of last week’s losses of more than 100 points.
Investors built stakes in miners such as Rio Tinto and Kazakhmys following an increase of 3.6% in the cost of copper and stronger prices of other metals.
And with oil prices climbing above $73 and within sight of a new record, heavyweights BP and Royal Dutch Shell attracted interest and helped the Footsie rise 59 points to 6082.1 – or 1%.
The rally in the price of oil saw BP stand 11.5p higher at 688p, while Shell lifted 27p to 1988p as traders worried that not enough spare oil was around to cover a shortfall if Iran halted supplies in protest at US-led pressure over its atomic ambitions.
It prevented the price of crude from falling during the weakest season for demand, but they were beaten to the top of the blue chip risers board by Cairn Energy, which gained more than 5% or 122p to 2448p on an upgrade from broker Merrill Lynch.
Miners were also well represented on the leaderboard. Kazakhstan-based copper producer Kazakhmys was 56p higher at 1194.5p and was followed by Rio Tinto up 135p to 3151p, Antofagasta, which was 86p stronger at 2440p, and Xstrata, which ticked 79p higher to 2063p.
And British Gas owner Centrica added 1.75p to 300.5p as reports that it was in talks with Gazprom over investment in the Russian firm’s Baltic pipeline were welcomed by the markets.
Clare Collingwood, a trader at CMC Markets, noted that banks were mostly stronger following first-quarter results from Credit Suisse that came in well ahead of already optimistic forecasts.
HSBC made the biggest strides in London as its operations are of an equally global nature to its Swiss competitor, adding 2% or 19.5p to 967p.
Royal Bank of Scotland advanced 19p to 1810p and Barclays gained 5.5p to 690.5p, but rivals that are heavily focused on the UK were not faring so well with Alliance & Leicester the largest loser with a 9p fall to 1114p.
Elsewhere, developments over the weekend drove up the share price of second-tier retailer House of Fraser after it confirmed it had received a very preliminary takeover approach, thought to be from Icelandic investment group Baugur.
Fraser’s shares were up 6% – 7.5p to 126.5p – as the department store chain once again found itself in the takeover spotlight.
Branston pickle owner Premier Foods was another on the way up – rising 8.5p to 305.5p – after it revealed it was mulling takeover opportunities. McVitie’s owner United Biscuits appeared to be among its targets.
Elsewhere, HMV shares dipped in early trading before moving 0.25p to 179p as Tim Waterstone dropped his attempt to buy back the book shop chain that bears his name and which is now owned by HMV.
The day’s biggest blue chip risers were Cairn Energy up 122p to 2448p, Kazakhmys up 56p to 1194.5p, Rio Tinto 135p higher at 3151p, and Xstrata up 79p to 2063p.
The heaviest fallers were Vodafone down 1.75p to 127.75p, ITV off 1.5p to 113.5p, Gallaher Group 10.5p lower at 860.5p and Kelda down 8.5p to 759.5p.