Miners help FTSE take step forward

The London market moved forward today, buoyed by a strong performance from the miners.

Although heavily-weighted oil stocks pulled the other way, gains of 5% and 3% for Vedanta Resources and BHP Billiton helped the FTSE 100 Index edge 11.3 points higher by mid-morning.

Vedanta added 63p to 1404p, BHP Billiton 34p to 1061p and Anglo American 74p to 2447p after Morgan Stanley upgraded it from underweight to overweight and said the sector is being driven by merger-and-acquisition activity.

Steel giant Corus was also in the black, up 12p to 406.75p, following speculation Evraz and Servestal were considering a bid for the firm.

In the opposite direction, lower oil prices and the impact of going ex-dividend meant oil group Royal Dutch Shell fell 19p to 1918p while BP eased 2p to 606p.

British Energy shares, down 4p at 714p, also remained under pressure after yesterday’s disappointing news on output levels.

Meanwhile, United Utilities lost 2p to 678p and Scottish & Southern Energy fell 4p to 1221p following downgrades from Evolution.

Other fallers included services group Rentokil Initial, off 4.75p to 160.5p following a downgrade by broker UBS.

Interest in the FTSE 250 Index was focused on MFI’s confirmation that it could dispose of its retail arm in a deal that would see both MFI and a private-equity firm make contributions to the ailing business.

The company warned this would dilute shareholder value, but investors appeared relieved at the possibility of a disposal and lifted shares 2.5p to 90p.

Elsewhere, Instore, the owner of the Poundstretcher chain, jumped 16%, 4.5p, to 32p after setting out plans to “modernise and update” its stores as part of a review aimed at boosting profitability.

An update also showed like-for-like sales were up 7.3% in the past 24 weeks.