Commodity stocks put the FTSE 100 Index back on the front foot today as buyers returned to the market following yesterday’s sell off.
The benchmark index fell more than 2% yesterday on fears the global financial crisis could get worse in the coming months.
But miners rose on higher metals prices and progress was helped by strong gains in Chinese markets on hopes for an economic stimulus package – leaving the Footsie 46.1 points higher at 5366.5 by mid-morning.
Commodity stocks accounted for the top five blue-chip risers, led by Tullow Oil - up nearly 7% or 47.5p to 741.5p after an upgrade for the prospector from UBS. Oil and gas equipment firm Wood Group also gained 18.75p to 424.5p.
The higher metals prices added ballast to the market as heavyweight mining stocks advanced. Rio Tinto stood 269p higher at 4910p, closely followed by its unwanted suitor BHP Billiton, which added 82p to 1602p.
On the fallers board, BT Group and Barclays fell 10.1p to 167.2p and 8.25p to 316p respectively after the stocks began trading without the right to the latest dividend payments.
Analysts at Collins Stewart also voiced fears over BT’s dividend outlook as cashflow comes under pressure from lower margins and higher capital expenditure.
Sainsbury’s was down 10.25p to 316.5p after industry figures showed a fall in the grocer’s market share from 16.1% to 15.8%. Marks & Spencer fell 6p to 249.75p amid concern about the retailer’s own performance.
The biggest faller in the FTSE 250 was Mecom – the media group run by former Mirror boss David Montgomery – as the stock was marked down after disappointing first-half results. Shares fell nearly 14% or 2.75p to 19.25p.
Takeover target Michael Page went the other way, up 37p to 367p, or 11% after the recruitment firm’s boss said the business could be sold for 600p or more in an interview with a Swiss newspaper.