Miners, banks drive FTSE up 0.7 percent

By David Brett

LONDON (BestGrowthStock) – Britain’s top shares closed higher for the third straight session on Tuesday as miners and banks extended the previous day’s gains but BP dragged energy stocks lower with fourth-quarter results that missed expectations.

The FTSE 100 (.FTSE: ) was up 35.90 points, or 0.7 percent at 5,283.31, after closing 1.1 percent higher on Monday.

Miners added the most points to the index as metal prices rose broadly following Monday’s bullish U.S. manufacturing data.

Rio Tinto (RIO.L: ) rose 3.4 percent after Citigroup upgraded the stock to “buy,” and Anglo American (AAL.L: ) put on 3.2 percent after SG Securities lifted its rating on the stock to “buy.”

Eurasian Natural Resources (ENRC.L: ), Kazakhmys (KAZ.L: ), Lonmin (LMI.L: ) and Xstrata (XTA.L: ) added 2.9-4.6 percent.

Banks continued to bounce. Standard Chartered (STAN.L: ), Barclays (BARC.L: ), Royal Bank of Scotland (RBS.L: ) and Lloyds Banking Group (LLOY.L: ) put on 0.5-3.7 percent.

Australia’s central bank surprised markets by not raising interest rates for a fourth consecutive time, citing the impact of higher mortgage rates at home while noting tighter policy in China and concerns over sovereign debt abroad.

Drugmaker GlaxoSmithKline (GSK.L: ) rose 1.2 percent ahead of its fourth-quarter numbers due on Thursday, while peer AstraZeneca (AZN.L: ), whose quarterly results were greeted with caution by brokers last week, fell 0.2 percent.

Travel and leisure firms were also in demand with Whitbread (WTB.L: ) a big gainer, up 2.3 percent after Goldman Sachs raised its target price.

Thomas Cook (TCG.L: ) and Tui Travel (TT.L: ) added 3 and 2.1 percent respectively while British Airways (BAY.L: ) also rose 3 percent, extending gains from the previous session and ahead of results due on Friday.

Among mid-caps, pub operators found good support after BofA Merrill Lynch reiterated its positive stance on the sector. Marston’s (MARS.L: ), Enterprise Inns (ETI.L: ) and Punch Taverns (PUB.L: ) firmed 3.4-5.3 percent.


Energy stocks were the main drag on the index, pushed lower by BP (BP.L: ), which fell 3.8 percent after missing forecasts with a 33 percent rise in fourth-quarter replacement cost profit and saying an operational turnaround could slow.

“After their stellar third quarter figures many ramped up expectation for the oil giant meaning that anything worse than another huge quarter would result in disappointment,” said Jimmy Yates, head of equities at CMC Markets.

The rest of the sector was higher as the price of crude rose above $75 a barrel.

Royal Dutch Shell (RDSa.L: ), set to report fourth-quarter figures on Thursday, added 1.1 percent, and BG Group (BG.L: ), due to report on Friday, rose 2.2 percent.

Investors banked profits on utilities, which were big gainers on Monday after mid cap Northumbrian Water (NWG.L: ) rallied on takeover speculation.

Northumbrian, which is yet to comment, shed 2.7 percent, while blue chip peers Severn Trent (SVT.L: ) and Centrica (CNA.L: ) dropped 1.9 and 0.3 percent respectively.

On the economic data front, pending sales of previously owned U.S. homes edged up as expected in December, which should help to calm fears of renewed weakness in the troubled housing sector.

The Bank of England interest rate decision is due on Thursday and investors will also await the December U.S. jobs report on Friday.

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Miners, banks drive FTSE up 0.7 percent