Mining stocks give FTSE a good start

Spectacular gains for mining companies ensured London’s FTSE 100 Index started the new month on the front foot today.

The Footsie dropped almost 9% in January, but set about recovering some of the deficit with a rise of 80.2 points to 5960 by mid-morning. The top flight had been within touching distance of the 6000 barrier earlier in the session.

Miners dominated the risers board after sentiment was lifted by a 200 point gain for the Dow Jones Industrial Average, as well as a deal today involving the sale of a 12% stake in Rio Tinto.

Shares in the mining company jumped 14% – or 689p to 5645p – after it emerged Chinese group Chinalco had joined forces with US aluminium firm Alcoa to buy the holding.

The pair said they had no plans for a takeover of Rio Tinto, but the stake-building added a new twist to BHP Billiton’s own plans for a takeover of Rio Tinto. And amid hopes of more consolidation in the sector BHP shares rose 166p to 1643p, Anglo American lifted 207p to 2957p and Antofagasta added 54p to 706p.

The dominance of the mining sector was broken on the FTSE 100 leaderboard by Taylor Wimpey, as housebuilders continued their recent volatile streak. Shares in the company lifted 14.9p to 194.2p, while rival Persimmon added 27.5p to 798.5p.

The other major corporate news of the session involved British Airways, which slipped 5% or 15.25p to 316.75p after the airline posted nine-month profits of £788 million but said its fuel bill could rise in its next financial year.

In the FTSE 250 Index, engineering company FKI caused its share price to jump by a third, after it said it had received a takeover approach from an unnamed party. FKI, which specialises in lifting equipment and material handling technology, was 18.75p higher at 69p.