London shares were back in favour today as investors began hunting down bargains after the recent stock market bloodbath.
The FTSE 100 Index closed 1.3% higher – up 79.8 points at 6138.5 – although analysts stressed it was too early to call an end to recent turbulence.
The session started brightly after a surge in the yen led to a recovery for Asian stocks, before Wall Street weighed in with its own improvement.
Miners found their way back on the risers’ board, after suffering in recent sessions, driven by rebounding metal prices.
Xstrata was up 70p at £24 as it reported a sharp rise in full year profits boosted by acquisitions and higher metal prices. Additionally, the group said it was set to benefit from favourable commodity prices in the year ahead.
The news drove the rest of the sector ahead with BHP Billiton gaining 27p to 1010.5p and Kazakhmys lifting 19p to 1080p.
Power station operator International Power set the pace in the top set, with a gain of 7%, reflecting its confident outlook and the fact that much of its UK power supply had been forward contracted at 2006 prices.
With profits at the top end of expectations after a 44% rise, shares were ahead 24.25p at 376.5p.
More Than insurer Royal & Sun Alliance rose 4.5p to 158.5p amid speculation that Finland’s Sampo could resume its takeover interest in the group following the completion of the disposal of RS&A’s North American business.
The wider insurance sector was in favour with Standard Life up 13.25p at 298.25p, Legal & General 5.5p higher at 154.75p and Friends Provident up 7p at 203p.
British Airways shook off some of yesterday’s disappointing news with a rise of 10.5p to 507p as it teamed up with Virgin Atlantic to try to block the draft open skies agreement between the European Union and United States. The agreement could raise the prospect of increased competition on BA’s prized transatlantic routes out of Heathrow.
In the second tier, shares in former MFI company Galiform jumped more than 19% after its full-year results exceeded expectations, led by reduced losses in its supply arm. Shares were up 24.25p at 151.5p, even though it took a £187.4 million hit on the sale of the MFI retail business.
Redrow shares pulled back from negative territory after warning that planning delays were having an impact on its performance. The stock recovered from 3% down to 3p higher at 615p, but other housebuilders were lower with Bovis Homes off 9p at 1016p and Bellway down 11p at 1431p.
The biggest Footsie risers were International Power up 24.25p at 376.5p, Standard Life ahead 13.25p at 298.25p, Reuters up 17.5p at 439.5p and Royal Bank of Scotland ahead 78p at 2159p.
The biggest fallers were Scottish & Southern Energy down 16p at 1450p, British American Tobacco off 7p at 1563p, Kelda down 4p at 882p and Reckitt Benckiser off 7p at 2538p.