FTSE buoyed by US gains

The London market was on the front foot today buoyed by strong gains in the US overnight.

The Dow Jones added more than 100 points during yesterday’s session, boosted by positive manufacturing data and a reported £5.5bn private equity bid for New York-listed Virgin Media.

The upbeat sentiment helped lift confidence on this side of the Atlantic to see the FTSE 100 Index 34.6 points higher at 6625.2 by mid-morning.

Engine maker Rolls-Royce was one of the Footsie’s top risers after it said it had experienced an “encouraging” performance in the second quarter of the year as it benefited from a strong order flow, most notably at its Airbus operations. The stock was up almost 4%, or 20p, to 555.5p.

Mining firm Lonmin rose 102p to 4281p as rumours of a potential bid from rival Xstrata persisted. The news helped lift stocks across the sector with Vedanta Resources climbing 29p to 1662p and Xstrata ahead 50p at 3108p.

Pub owners were also in demand with stocks Enterprise Inns and Punch Taverns buoyed by better-than-expected profits from Greene King in the second tier.

Enterprise Inns cheered 14p to 687.5p and Punch Taverns moved 32p higher to 1252p as Greene King – up more than 7%, or 72p, to 1032p – also announced plans to unlock more value from its pub portfolio by spinning off up to a third of its sites into operating and property companies.

Share fallers were thin on the ground in the top flight, but brewer Scottish & Newcastle was one casualty, off 1.5p at 631p, after the Kronenbourg-maker warned that UK first-half profits would be lower than last year.

Meanwhile a broker downgrade from UBS saw oil and gas major BG Group drop 18p to 813.5p after UBS warned that it expected the recent strong flow of positive exploration updates from the company to begin to slow.