Soaring mining stocks took the FTSE 100 Index back above the 6,000 mark today as London’s shares gained more than 2%.
The benchmark index regained the psychological foothold as renewed takeover speculation in the heavily-weighted sector lifted stocks higher.
At the close the Footsie was 149.4 points ahead at 6029.2 – its first close above 6,000 since January 15.
Blue-chips shrugged off a volatile beginning on Wall Street as traders absorbed better-than-expected manufacturing data offset by disappointing jobs figures.
In London, miners dominated the risers board after sentiment was buoyed by a deal today involving the sale of a 12% stake in Rio Tinto.
Shares in the mining company jumped 13% – or 644p to 5600p – 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 145p to 1622p, Vedanta Resources lifted 160p to 1960p and Antofagasta added 47.5p to 700p.
The mining sector accounted for four of the top five firms on the the FTSE 100 leaderboard but Taylor Wimpey also featured strongly as housebuilders continued their recent volatile streak. Shares in the company lifted 13.7p to 193p, as hopes for the group’s US operation were bolstered by recent cuts in US interest rates. Rival Persimmon added 21p to 792p.
The other major corporate news of the session involved British Airways, which slipped more than 4% or 14p to 318p after the airline posted nine-month profits of £788m (€1bn) but warned its fuel bill could rise in its next financial year.
The flagship carrier was the leading Footsie faller, but it was closely followed by knee-implant and surgical instruments maker Smith & Nephew. Brokers at Nomura marked down the stock – which fell 26.5p to 655.5p – amid fears of disappointing results next week after a difficult fourth quarter.
Property firm British Land was another victim of a broker downgrade, as Credit Suisse voiced concerns over a cyclical office market. Shares fell 21.5p to 988.5p.
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 16.75p higher at 67p.
The leading second-tier faller was crisis-hit mortgage lender Northern Rock ahead of Monday’s deadline for expressions of interest in the business. Shares fell more than 10%, or 11p, to 96p.
The four biggest Footsie risers were Rio Tinto, up 644p to 5600p, BHP Billiton up 145p to 1622p, Vedanta Resources up 160p at 1960p and Taylor Wimpey which ended 13.7p up at 193p.
The Footsie’s four biggest fallers were British Airways, down 14p to 318p, Smith & Nephew down 26.5p to 655.5p, Marks & Spencer down 9.5p to 434.5p and British Land off 21.5p to 988.5p.