London’s blue-chip FTSE 100 Index managed to break through the 5300 level and move to a new 14-month high after heavyweight miners, energy majors and real estate stocks rallied.
Mining stocks were in demand this morning, as investors bought commodities to hedge against a depreciating US dollar. December gold futures climbed to a new record high of $1133.5 per troy ounce today, while December copper futures gained 2.1% to $3.0345 per pound.
Lonmin was at the top of the FTSE leader board this morning, up 7.3% to 1709p a share, despite unveiling an annual loss of 59 cents a share on the back of weak platinum prices and lower output. The world’s third largest platinum producer said it stands to benefit from a shortage in global platinum supplies, which will help lift the metals’ price. It also said that it will boost its output of refined platinum by over 20% to 850,000 ounces by 2013.
Xstrata was the FTSE’s second best performing stock so far, up 5.6% to 1071p followed by Randgold Resources, which was 5.3% higher at 4957p, and Rio Tinto which was 5% above its previous close at 3288.5p.
Energy majors gained after December crude oil futures advanced more than 1% to $77.33 a barrel. BP climbed 1.5% to 589.8p while Tullow Oil added 1.4% to 1257p and Cairn Energy rose 1.3% to 2908p.
Real estate shares contributed to the FTSE’s ascent as well, with Segro rising 3.1% to 385.2p and Hammerson gaining 3% to 458.4p after mid-cap house builder Persimmon reported encouraging third quarter results. The company also said it has met its sales targets for the year and that its debt position at the end of the year will be ‘significantly lower’ than its previous guidance of £400 million.
British Land, which reports tomorrow, may say that the value of its property portfolio has gained for the first time since the recession. Its shares were 2.6% higher at 511p.
By 10:30am (London time), the FTSE 100 was trading 62.45 points (+1.18%) higher at 5358.83, while the broader FTSE 250 was 83.82 points (+0.89%) above its previous close at 9457.56.
The banking sector provided little support to the FTSE today, with a 1.8% gain in HSBC and 1% rise in Barclays partially countered by marginal declines in Lloyds Banking Group and Royal Bank of Scotland, which were trading at 89.7p and 37.13p respectively.
Lloyds Banking Group came under some pressure after the Sunday Times newspaper said the state-backed bank has been forced to wipe off up to £600 million of pub chain Admiral Taverns's debt.
Elsewhere, electrical goods supplier DSG International, which owns Currys and PC World, gained 1.7% to 38.67p after Credit Suisse raised their price target on the stock to 50p from 38p. Moneysupermarket.com jumped 5% to 84p after announcing that its third quarter has been its strongest so far this year. It was also confident about its full year outlook.
AIM listed Victoria Oil & Gas rallied 7.2% to 5.95p a share after revealing that it has found gas sands at its Logbaba project in Cameroon – a development that will enable it to apply for a 35-year exploitation and production license.
Looking ahead to the US, December Dow and S&P 500 futures traded between 0.6% and 0.8% higher, suggesting that Wall Street is gearing up for a positive start when it opens this afternoon.
It is important to keep an eye out for the US retail sales and New York Empire State Manufacturing figures, which are scheduled for release at 1:30pm (London time). Meanwhile, US business inventory data will be published at 3pm.
