FTSE led higher by miners; BoE hold rates
Britain's top share index rose on Thursday, helped by gains in mining stocks on firmer metals prices and a surprise quarterly profit from U.S. aluminium producer Alcoa (AA.N).
By 1116 GMT, shortly after the Bank of England kept interest rates unchanged as expected, the FTSE 100 .FTSE was up 30.07 points, or 0.6 percent, at 5,138.97. It lost 0.6 percent on Wednesday.
The BoE held interest rates at a record low of 0.5 percent for the seventh month running and said it would keep its 175 billion pound asset buying programme in place.
Absolutely no surprise -- we can see that neither the market nor sterling has moved at all really, said Rob Griffiths, strategist at Cazenove.
The crunch comes next month in the sense that we are going to complete the programme of QE -- at the next meeting they need to make a decision whether or not they extend the QE further and that's going to be the key decision really, he said.
Miners added the most points to the index, buoyed by a rise in metals prices, including gold XAU= at record highs, and Alcoa detecting signs that key markets were stabilising and expecting global consumption to rise by 11 percent in the second half of this year.
Indian-focused mining group Vedanta Resources (VED.L) was a top blue-chip gainer, up 4 percent after posting a 15.6 percent rise in second-quarter output of refined zinc and a 27.3 percent increase in iron ore, its two most important minerals, in a second-quarter production report.
BHP Billiton (BLT.L), Lonmin (LMI.L), Fresnillo (FRES.L), Xstrata (XTA.L), Kazakhmys (KAZ.L), Rio Tinto (RIO.L) and Randgold Resources (RRS.L) added 2 to 3.8 percent.
Energy stocks were also in favour, rebounding after falls the previous session as the crude price CLc1 rose above $70 a barrel. BG Group (BG.L), Cairn Energy (CNE.L) and Tullow Oil (TLW.L) gained between 0.6 and 2.9 percent.
Tullow Oil's CFO said Exxon Mobil (XOM.N) buying into Ghana Jubilee field would be good for the project.
Among individual movers, BT Group (BT.L) added 3.1 percent, aided by an Exane BNP Paribas upgrade to outperform from underperform.
GlaxoSmithKline (GSK.L) rose 0.3 percent, boosted by a report by a leading tracker of prescription drug data, which showed global pharmaceutical sales were proving more resistant than expected to the economic slowdown.
BANKS MIXED
It was a mixed picture among banking stocks. Heavyweight HSBC (HSBA.L) put on 0.2 percent, while Standard Chartered (STAN.L) added 2.6 percent.
HSBC has resumed talks with Royal Bank of Scotland (RBS.L) over the purchase of the remaining retail and commercial units that bailed-out RBS owns in Asia, sources said.
RBS was on the back foot, down 1.5 percent.
Lloyds Banking Group (LLOY.L) was also lower, off 3.3 percent. The Financial Times said the part-nationalised lender was sounding out investors about a 15 billion pound ($24 billion) rights issue to help it avoid a government scheme to insure against credit losses.
The European Central Bank left interest rates unchanged as expected.
© Copyright Thomson Reuters 2024. All rights reserved.