Mining sector boosts FTSE

Takeover rumours in the mining sector helped spur on the London market today after yesterday’s heavy losses.

Rumours that mining giants BHP Billiton and Brazil’s CVRD may be setting their sights on rival Rio Tinto sent shares in the group soaring 4%, or 148p to 3673p.

Other miners joined Rio on the risers board, keeping the FTSE 100 Index in positive territory, up 21.8 points at 6292.5.

Blue chips had suffered yesterday after Wall Street took a dive following poor home sales figures in the US.

But merger and acquisition talk, corporate news and expectations for a hold decision by the Bank of England on UK interest rates gave the market a boost.

Rio’s potential suitor BHP Billiton followed the group in the list of share risers, up 25p at 1442p, with Anglo American also ahead, up 46p at 2887p and a raft of fellow miners not far behind.

A new oil discovery in offshore Brazil meant BG Group enjoyed a lift of 25.5p to 812p.

Punch Taverns was also up, by 8p at 1074p, after reports that the chief executive had indicated on unveiling its interim results that the business may spin-off its managed Spirit division.

Electricity generator Drax topped the list of top share fallers, despite posting a 21% rise in interim earnings as higher realised prices offset lower output. The stock slid 4%, or 26p, to 649.5p.

Banks were also on the back foot, with Royal Bank of Scotland leading the losses, off 15.5p at 551.5p, followed by Barclays down 12.5p at 608p.

In the second tier, support services group Amec surged nearly 5%, or 31.5p to 686.5p, after the disposal of non-core business helped the firm deliver a 127% rise in underlying pre-tax profits.