Mining stocks raise FTSE to one-year high

Gains of more than 5% for a string of mining stocks helped the FTSE 100 Index surge to its highest point in a year today.

The Footsie suffered a slump in tandem with US markets yesterday, but this was quickly forgotten as the top flight recouped all of the losses to stand 92.4 points higher at 5246.5 by mid-morning.

Rio Tinto, up 145.5p to 2993.5p, boosted the mining sector after the dual fillip of higher full-year production targets and better-than-expected iron ore prices. Rio was followed by Xstrata and Kazakhmys, up 46.5p to 1004p and 62p to 1240p respectively.

Spirits were also lifted by better-than-predicted third-quarter earnings news in the United States, with the latest boost coming from technology giant Intel last night.

The mood in London was also helped by unemployment figures showing the number of people seeking jobseeker’s allowance in September increased by 20,800 to 1.63 million – the smallest rise since May 2008.

The improvement in market confidence was reflected in the banking sector as Royal Bank of Scotland lifted 2p to 49p and Lloyds Banking Group added 3.6p to 93.4p.

Elsewhere in the top flight, luxury goods group Burberry rose 3% after it reported a better-than-expected performance for the quarter to September 30, helped by strong demand for handbags in its autumn and winter collection. With quarterly sales 5% higher in its retail division, shares rose 19.5p to 556.5p.

Other retailers also recovered their poise after heavy losses yesterday on fears the weaker pound will drive up purchasing costs. Next was up 29p to 1783p, but Marks & Spencer retreated another 3.7p to 343.2p amid an apparent lukewarm response to yesterday’s meeting with investors and analysts.

In the second tier, Punch Taverns fell 12% or 13.4p to 102.5p after it slashed the value of its estate and plunged to a full-year loss of £405.7 million.