Commods, banks drive FTSE to fresh 21-month high

* FTSE up 0.2 pct; hits new 21-month intra-day peak

* Miners bolstered by iron ore deal

* Oils gains as crude breaches $82.50 a barrel

By Jon Hopkins

LONDON, March 30 (BestGrowthStock) – Strong gains from commodity
stocks and banks drove Britain’s top share index 0.2 percent
higher to a fresh 21-month intra-day peak early on Tuesday, in
the penultimate session of the first quarter.

At 0750 GMT, the FTSE 100 (.FTSE: ) index was 10.55 points
higher at 5,721.21, slipping back below a new peak of 5,742.75
hit earlier, having closed 0.1 percent higher on Monday.

“It’s the miners again providing the most strength, but with
the end of the quarter and the long Easter break approaching
investors are unlikely to push the market too much higher,” said
Mic Mills, senior trader at ETX Capital.

Commodity stocks provided the biggest boost for the blue
chips as a retreating dollar lifted crude (CLc1: ) and metal
prices after recent weakness.

Miners also got a boost after BHP Billiton (BLT.L: ) and
Brazil’s Vale (VALE5.SA: ) said they had persuaded Japanese steel
mills to buy iron ore based on a quarterly pricing system as of
April 1.

The move signals the demise of annual fixed-price contracts
that analysts said were costing miners billions of dollars in
lost revenue. [ID:nSGE62T02E]

BHP Billiton shares took on 2.3 percent, while Xstrata
(XTA.L: ), Rio Tinto (RIO.L: ), Anglo American (AAL.L: ) and
Antofagasta (ANTO.L: ) added 1.6 to 2.8 percent helped by a sector
review from Deutsche Bank, which raised target prices.

Among oil majors, BP (BP.L: ), BG Group (BG.L: ), Royal Dutch
Shell (RDSa.L: ) and Cairn Energy (CNE.L: ) gained 0.1 to 0.6
percent as crude rose above $82.50 a barrel.

Oil services firm Amec (AMEC.L: ) also saw good demand, up 1.6
percent, as it acquired a UK consultancy, Entec for an initial
61.2 million pounds, prompting Seymour Pierce to up its rating
to “outperform” from “hold”. [ID:nSGE62T07X]

Mobile telecoms heavyweight Vodafone (VOD.L: ) also moved
higher again, up 0.5 percent following recent press reports
concerning possible dividends from its U.S. wireless
joint-venture with Verizon (VZ.N: ).

Banks were mixed but added strength as a sector thanks to
gains in global heavyweight HSBC (HSBA.L: ), up 0.4 percent, while
Barclays (BARC.L: ) gained 0.7 percent.

But part-nationalised banks Royal Bank of Scotland (RBS.L: )
and Lloyds Banking Group (LLOY.L: ) shed 0.5 and 0.4 percent,
respectively, unsettled by some uncertainty about what a British
government might do with its stakes in the two following the
impending general election.

PHARMA RETREATS

Drug stocks were the biggest weight on the index as recent
gains unravelled, with the sector’s defensive attractions
sidelined.

Shire (SHP.L: ) was the hardest hit, down 1.3 percent, with
GlaxoSmithKline (GSK.L: ) and AstraZeneca (AZN.L: ) down 0.5 and 0.4
percent, respectively.

Other defensive sectors such as drinks and tobaccos were
also weak, with Diageo (DGE.L: ), Imperial Tobacco (IMT.L: ) and
British American Tobacco (BATS.L: ) down 0.1 to 0.3 percent.

British house prices rose 0.7 percent in March, largely
reversing the previous month’s fall, the Nationwide Building
Society said on Tuesday, in a sign the housing market recovery
is not completely over.

February’s decline, which ended a run of nine straight
monthly rises, was revised to show prices falling by 0.8 percent
instead of the 1 percent drop reported last month.
[ID:nLAG006193]

Investors will also watch the final reading for UK 2009 GDP
data, due for release at 0830 GMT, for clues on the state of the
economy.

Investing

(Editing by Erica Billingham)

Commods, banks drive FTSE to fresh 21-month high