Mining stocks boost FTSE

Miners drove a rally for the FTSE 100 Index today after G20 finance chiefs vowed to avoid a currency war that could derail the economic recovery.

While the gathering in Korea stopped short of setting any measurable targets, the group of 20 major advanced and emerging nations resolved to avoid weakening currencies to boost exports – a scenario that could cause a trade war.

This added to pressure on the US dollar, which has fallen sharply in recent weeks as investors await a move from the Federal Reserve to pump more money into the US economy.

With the weak greenback making dollar-based mining stocks more attractive to investors, the FTSE 100 Index added 38.6 points to 5780. Antofagasta topped the risers board with a gain of 54p to 1323p, a rise of 4%, while Kazakhmys added 48p to 1381p and Xstrata lifted 45.5p to 1335p.

The recent trends for world currencies continued today with the pound up against the dollar but down against the euro after hitting a six-month low against the single currency on Friday.

In a quiet session for corporate news, Pearson shares fell 1% despite the Penguin, Financial Times and school books publisher lifting its earnings guidance for the second time in three months. The stock fell 10p to 966p as Pearson cautioned that the fourth quarter was a crucial selling season for its education and consumer publishing divisions.

Lloyds Banking Group topped the fallers board, down 2.1p to 69.7p after Credit Suisse cut its price target on the stock.

It said the market’s consensus forecast for 2011/12 revenues was 5% too high and said that a 10% fall in residential property prices over an 18 month period could increase impairment charges by up to £5bn (€5.6bn).

The update also knocked Royal Bank of Scotland, which slipped 0.6p to 45.6p.

Outside the top flight, shares in McBride, which makes supermarket own-label products such as laundry liquids, mouthwash and toothpaste, rose 2.5% after it announced a 1% rise in sales between July 1 to October 24, even though chief executive Chris Bull admitted big brands were fighting hard for sales.

He said the promotional spree was not necessarily bad news for McBride as consumers would become accustomed to paying low prices for brands and when the average price increased again they would buy even more supermarket own label goods, which would offer better value for money.