Energy stocks and miners gain as commodities bounce back

FTSE: 5923.49 (+62.49) Mid-250: 11,887.54 (+51.55) Small Cap: 3,259.39 (+16.98)STRONG ENERGY stocks and miners drove Britain's top shares higher yesterday as investors welcomed results from Land Securities, ahead of a Federal Reserve announcement which could drive markets.

The FTSE 100 index ended up 62.49 points, or 1.1 per cent, at 5,923.49.

While the index managed to erase the previous sessions 1.1-percent drop on the back of weak US housing data, concerns about the strength of the recovery lingered.

Rallying metals prices helped miners bounce back after a recent sell-off, with investor sentiment buoyant in advance of a heavily oversubscribed IPO from commodities trader Glencore.

Eurasian Natural Resources was the best off, up 4.3 per cent, as Citigroup lifted its rating on the company to “buy”.

“Miners are firm today ahead of the Glencore IPO but it does start to feel as if everybody owns the market already and the marginal buyer has gone on holiday,” said Lex van Dam, hedge fund manager at Hampstead Capital, which has $500 million of assets under management.

It was a similar story with integrated oil stocks, which rebounded from recent losses in tandem with crude, with BG Group leading the charge, up 3.1 per cent, after an upgrade to buy from UBS.

Land Securities was the standout FTSE 100 riser, up 6.4 percent, after the landlord and developer posted a double-digit rise in full-year net asset value, prompting Panmure Gordon to hike its target price for the stock.

Buyers came in for other real estate investment trusts. British Land, due to unveil full-year results on May 23rd, added 4.6 percent, Hammerson climbed 3.2 per cent, and Capital Shopping Centres was 1.2 per cent firmer.

Elsewhere, British oil services and engineering group AMEC rose 1.8 per cent after buying

U.S. engineer MACTEC for $280 million to boost its presence in North America in a deal that will be earnings enhancing this year.

On the downside, Compass Group slipped 0.7 per cent as investors locked in profits after a strong run-up by the stock as the caterer reported solid first-half results.

Admiral, HSBC and Sainsbury all fell after going ex-dividend. – (Reuters)