Miners lift FTSE to 29-month closing high

By Simon Falush

LONDON (BestGrowthStock) – Strength from miners pushed Britain’s top share index higher by close on Friday, as data showing the U.S. labor market was surprisingly strong lifted confidence on the outlook for the global economy.

The FTSE 100 ended 12.56 points, or 0.2 percent, higher at 5,875.35 after it jumped 2 percent on Thursday.

The index closed at its highest in 29 months for a second day after equities were given a shot in the arm on Wednesday when the Federal Reserve announced its decision to buy $600 billion in government bonds to support a struggling U.S. economy.

But gains were muted on Friday as banks fell on concerns about the domestic and continental European financial landscape.

Royal Bank of Scotland dropped 4.5 percent after reporting third-quarter results. It said it expected challenging market conditions in the fourth quarter and saw a UK bank tax adding up to 250 million pounds ($403.4 million) to its costs next year.

The UK banking index was off 0.9 percent, weighed as their European counterparts retreated on fears about the instability of the peripheral euro zone economies, and the risk of more capital hikes in the sector.

“The macro front in the U.S. is looking better than the doomsday scenario, but the scene from Europe is not as good, and so there’s a wait and see attitude,” said Giles Moec, senior European economist at Deutsche Bank.

Europe’s biggest bank HSBC fell 1.8 percent with traders citing profit-taking after it said profits in the third quarter and for the year to date were “well ahead” of a year ago.

MINERS MAJOR SUPPORT

Miners provided the bulk of the gains as copper flirted with record highs on the increased optimism on the demand outlook.

Vedanta Resources was the star FTSE 100 reporter, up 5.9 percent while Eurasian Natural Resources gained 4.4 percent.

Drugmakers were also among the top performers as investors rotated into the sector, which was boosted after strong results from Smith & Nephew.

Smith & Nephew added 6.2 percent after the orthopaedic products firm beat expectations on its third-quarter results, while GlaxoSmithKline was up 2.8 percent.

Invensys climbed 4.4 percent as both Morgan Stanley and Societe Generale hiked their target prices for the engineering group following results on Thursday.

Back on the downside, Rolls-Royce was the heaviest loser, down 4.9 percent, weighed by the engine failure this week of an A380 operated by Qantas Airways.

After the UK market closed a General Electric spokesman said engines on the plane that made emergency landing in Singapore were not made by GE but by Rolls-Royce.

The FTSE 100 was up 3.5 percent this week after it added over 8 percent in the previous month, and analysts said technical indicators suggested it may be set for a pause.

“Next resistance is set around 5960,” said Nicolas Suiffet, analyst at trading central. “However, the index gained a bit too fast and a consolidation move cannot be ruled out in the forthcoming days.”

However, he said only a break below 5623 would dampen the bullish sentiment.

(Editing by Sharon Lindores)

($1=.6198 Pound)

Miners lift FTSE to 29-month closing high