FTSE rises to 3-week high, lifted by miners, retailers

By Tricia Wright

LONDON (BestGrowthStock) – Britain’s top share index rose to a three-week high on Monday, boosted by miners on firmer metals prices, and retailers, led by Sainsbury on renewed speculation of Qatari interest.

By 1221 GMT, the FTSE 100 was up 71.43 points, or 1.2 percent, at 5,841.71, after it ended up 0.4 percent on Monday at its highest closing level since November 15.

“It would seem that investors are brushing aside the concerns over the euro zone and focusing on the good value that stocks present at the moment,” Angus Campbell, head of sales at Capital Spreads, said.

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 2.8 percent, on made a $3.5 billion bid approach for Africa-focused Riversdale Mining on Monday.

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.

RETAILERS BOUGHT

Buyers snapped up retailers, with Sainsbury 4.1 percent firmer, as traders cited market talk of 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.

Tesco, which posted a 7.2 percent rise in third-quarter sales driven by demand from overseas markets, added 1.9 percent.

Energy stocks rose as crude prices headed above $90 a barrel for the first time in 26 months as freezing conditions in Europe and the United States stoked fuel demand.

“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.

And Unilever added 2.6 percent, buoyed by a Morgan Stanley double upgrade in rating for the Anglo-Dutch food and household products giant to “overweight” from “equal-weight,” traders said.

U.S. stock index futures pointed to a higher opening on Wall Street on Tuesday, after President Barack Obama announced plans to extend tax breaks.

(Editing by Louise Heavens)

FTSE rises to 3-week high, lifted by miners, retailers