FTSE 100 rises with gains for miners

Friday 5th June 2009

The FTSE 100 was up on Friday with gains for miners leading the way.

At close of play, the index of top companies stood at 4,437.51 – a rise of 50.57 points or 1.15 per cent – after just falling below the 4,500 mark in the afternoon.

Miner Rio Tinto was up 10.55 per cent, while Vedanta, Eurasian and BHP Billiton all saw gains over seven per cent.

Man Group was up 9.90 per cent.

Thomas Cook was down 4.77 per cent, Hammerson fell 4.04 per cent and Liberty International was down 1.96 per cent.

Supermarket Morrisons was down 1.97 per cent.

David Jones, chief market strategist at IG Index, explained as the political world was dominated by Gordon Brown's cabinet reshuffle, traders were more interested in mining and the US.

"Mining news dominated the morning session, when Rio Tinto confirmed it was abandoning its potential deal with Chinalco and looking instead at a rights issue and a joint venture with BHP Billiton," he said.

"After this, focus was firmly on the US unemployment results. At the moment, this is arguably the most important announcement on the economic calendar, as investors look for further confirmation that global economies are past the worst.

"The number did not disappoint; the expectation was for around half a million jobs to have been lost in the US in May, but when this came in 30 per cent better than expected, sharp rallies were seen for stock markets."

However, he explained the gains were short-lived.

"As far as stock markets are concerned, it looks like a large chunk of these potential green shoots are already reflected in the price," Mr Jones said.

"If markets can’t stage a sustainable rally on the back of such surprise good news, then it does look as though we may well have seen the best for share prices for a while."

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