FTSE firmly higher as rising metals prices drive miners up

MORNING REPORT: Headline shares made firm early gains, with mining issues leading the way as metals prices resumed their rise, with global markets buoyed after China avoided raising rates despite soaring inflation.

At 8:30am, the FTSE100 was up 24.89 points at 5,837.84 with the FTSE250 ahead 63.1 points at 11,344.1 and the FTSE Smallcaps 3.93 points higher at 3,113.79.

US & ASIA

In the US Friday, the Dow rose 40 points at 11,410, the Nasdaq Composite added 21 points at 2,638 and the S&P500 gained 7 points at 1,240.

In Asia today, the Nikkei closed up 82 points at 10,294, while the Hang Seng was recently ahead 155 points at 23,318.

LONDON MARKETS

Early focus was on commodity plays as oil and metals prices continued to climb, after China shied away from raising interest rates as inflation topped 5%.

Understandably, miners topped the leaderboard early on, with ENRC the best of them, up 22p at 987p. Kazakhmys added 36p at 1,565p and Xstrata gained 30.5p at 1,471.5p.

Oil producers rose as crude headed back over $88 a barrel, with BP up 1.65p at 456.65p, Shell ticked up 6p at 2,040.5p and BG Group was 9.5p better at 1,312.5p.

A major acquisition by Wood Group brought oil industry service groups into focus. Wood shares jumped 26.8p at 515p, while peer Petrofac rose 34p at 1,477p and AMEC added 9p at 1,124p in response.

Retailers were buoyed by a report from the BRC that most expect Christmas sales to be at least as good as last year, with Sainsbury a leading light, ahead 2.5p at 377.1p. Morrisons gained 1.2p at 271.2p and Tesco edged up 0.05p at 427.8p, while M&S rose 0.8p at 378.8p.

British Airways was in demand, up 4.6p at 278.9p, investors happy that it maintains is 15% shareholding in regional carrier Flybe which recently raised £66m from a stock market flotation to expand its operations.

Household goods and healthcare group Reckitt Benckiser rose 37p at 3,546p on news it is acquiring India's Paras Pharma for around £460m.

Commercial property firms remained in the limelight as the Capital Shopping Centres Group bid to acquire Manchester's Trafford Centre mall rumbles on. CSC added a penny at 391p, while Hammerson added 2.7p at 413.2p and British Land gained 2.5p at 510.5p.

In the financial world, banking issues were mixed, with Barclays ahead 1.65p at 273.85p and Royal Bank of Scotland edging up 0.06p at 41.75p, while Lloyds slipped 0.29p at 68.11p.

Further on the limited downside, chip designer ARM Holdings slumped to the foot of the table, down 2.5p at 393.4p, while holiday group TUI Travel lost 0.6p at 231.2p and defence contractor BAE Systems fell 1.7p at 328.7p.

Story provided by StockMarketWire.com