FTSE ends at highest in over 3 weeks

By David Brett

LONDON (BestGrowthStock) – Britain’s top shares closed at their highest level in over three weeks Tuesday, lifted by commodity markers and retailers as equities remained the preferred asset class among investors despite macro concerns.

The FTSE 100 ended up 38.17 points, or 0.7 percent, at 5,808.45, having closed 0.4 percent higher Monday and 7.3 percent ahead from the start of 2010.

“There’s very little evidence out there as to why we should neglect equities for the time being,” said David Buik, senior partner at BGC Capital.

“Despite concerns over sovereign debt, it appears equities have declared UDI from economic reality, which is perfectly sensible bearing in mind corporate results are better than they have been, companies are now mean and lean and they’re paying dividends.”

Retailers received a boost from Tesco, up 2.4 percent, after Britain’s biggest retailer posted a 7.2 percent rise in third-quarter sales.

Peer Sainsbury was 4.3 percent firmer as traders cited market talk of renewed interest from Qatar.

A trader said he was “hearing talk of Qataris bidding 450 pence (per share) for Sainsbury” but added the stock could be gaining on the back of Tesco’s strong quarterly figures.


Mining stocks added the most points to the blue-chip index, as metals prices rose, with copper rallying to a new record of $9,000 a tonne on tight supply and rising demand expectations, as well as short covering.

Analysts said sentiment was also helped by M&A activity, after Rio Tinto, which rose 1.1 percent, made a $3.5 billion bid approach for Africa-focused Riversdale Mining Monday.

However, gains may be capped by concern over a possible Chinese rate hike. China is likely to raise interest rates in the coming days in a demonstration of the government’s resolve to tame inflation, an official newspaper said.

Energy stocks rose as crude prices hovered near $90 a barrel, supported by freezing conditions in Europe and the United States.

“There’s an expectation that temperatures could fall quite significantly in the eastern United States, so the markets are as much watching the weather as they are watching the screens,” Henk Potts, equity strategist at Barclays Wealth, said.

Among individual movers, Wolseley rose 4.2 percent, after the plumbing supplies firm issued an above-forecast first-quarter trading update.

On the second line, housebuilders were strong performers after Bellway, up 9.8 percent, said it expects first-half profit to rise up to 20 percent.

Unilever added 2.7 percent, buoyed by a Morgan Stanley double upgrade.

Banks, which are sensitive to economic worries in the euro zone, rallied marginally after the Irish government urged parliament to approve a tough 2011 austerity budget.

Gains were underpinned as U.S. stocks (Read more about the stock market today. ) jumped to a fresh two-year intraday high Tuesday as investors bet that a deal to extend tax breaks will prompt increased spending and buoy the economy.

(Editing by David Cowell)

FTSE ends at highest in over 3 weeks