Mining helps FTSE gather momentum

Stronger mining and banking stocks today helped the London market to build on the momentum seen at the end of last week.

While oil prices below $70 a barrel put pressure on heavyweight stock BP, the FTSE 100 Index still managed to close in on the 6000 barrier, reaching mid-morning 22.1 points higher at 5971.2.

With US traders on a public holiday and volumes light, traders were not expecting a major session of developments for the top-flight index.

Among the miners, Rio Tinto rose 75p to 2760p and BHP Billiton lifted 22p to 1029p as the joint owners of a strike-hit mine in Chile saw workers return to their posts after a month-long dispute.

Banking stocks were also in favour, with Lloyds TSB up 5p at 530.5p, Northern Rock ahead 14p at 1144p and Bradford & Bingley 9p stronger at 471.75p. Barclays proved the exception after a fall of 2.5p to 671p.

Oil stocks BP and Cairn Energy were under pressure because of the falling price of crude. BP slipped 3.5p to 592.5p and Cairn dipped 41p to 2104p, on the eve of half-year results from the India-based explorer. Royal Dutch Shell held firm with a gain of 3p to 1880p.

Outside the top flight, market research company Taylor Nelson Sofres gained as it offset an 11% fall in half-year profits with news of plans to turn around its troubled American division. Shares were up 4.75p at 199p, a gain of 2%.

Set-top box firm Pace Micro Technology saw its shares fall 5% today, even though it said it was confident the business had started to recover. Delays to orders in the United States meant full-year underlying losses hit £15.6 million. Shares were 1.25p lower at 53.75p, despite the company saying shipments had started to flow.