FTSE on the up

Blue-chip Old Mutual led the FTSE 100 Index higher today as miners also lent support on hopes that Australia’s election result will scupper a new super tax.

The Footsie rose 42.8 points to 5238.1 in a welcome return to positive territory after three consecutive sessions in the red.

America’s Dow Jones Industrial Average was also heading for a higher opening as investors gained confidence amid a pick-up in merger and acquisition activity.

Old Mutual was the biggest gainer on London’s FTSE 100, up 4% or 5.4p to 126.4p, as HSBC confirmed plans to bid for a controlling stake in Nedbank, which is majority owned by Old Mutual.

HSBC rose 1%, up 5.6p to 639.8p, on the announcement of its exclusive talks to snap up South Africa’s fourth largest bank.

Miners were in sharp focus in the UK and in Australian markets as investors digested the implications of the country’s inconclusive election result over the weekend.

The prospect of a hung parliament sent the Australian dollar down, but markets remained flat and stocks in mining companies rose as the Australian government’s plans for a new tax on their profits were thrown into doubt.

Anglo-Australian mining group BHP Billiton was up 39.5p at 1860.5p in London as its aims to take over Canada’s PotashCorp – the world’s biggest fertiliser producer – also remained in the spotlight.

Potash, which has rejected the hostile approach, said it had been approached by third parties since news broke of BHP’s $40bn (€31.5bn) bid.

Other miners on the rise included Fresnillo, up 46p to 1326p, and Anglo American, 59.5p ahead at 2399.5p.

After a shaky start, gas explorer and production group BG Group held on to last week’s stellar gains seen on speculation that two possible bidders were willing to pay at least £16 a share, valuing the company at around £54bn (€66bn).

It was down 11p at one stage, but later stood 1.5p higher at 1093p.

In the FTSE 250, Lloyd’s of London insurer Amlin lost 3%, down 14.7p to 407.2p, as its half-year results missed analyst expectations.

The group’s profits slumped 39% after it was hit by the Chilean earthquake and windstorm Xynthia in Europe.

Rival Hiscox also suffered from claims relating to the natural disasters, but shares were 3% up – 10p higher at 353.7p – as interims topped market forecasts.