Footsie gains as mining and financials rally on resignation of Mubarak

FTSE: 6,062.90 (+42.89) Mid-250: 11,797.77 (+76.17) Small Cap: 3,282.69 (+5.39)COMMODITY AND banking stocks drove Britain's FTSE 100 share index higher yesterday, as traders welcomed the decision of the Egyptian president Hosni Mubarak to resign.

Egypt’s vice-president Omar Suleiman said yesterday that Mr Mubarak had bowed to pressure from the street and resigned, handing power to the army.

“The market has taken the news well. It has cleared some uncertainty and boosted investor sentiment,” Jimmy Yates, head of equities at CMC Markets, said.

The FTSE 100 index closed up 42.89 points, or 0.7 per cent, at 6,062.90, bouncing off a session low of 5,973.44.

Miners and energy stocks rallied on the news from Egypt. Mid cap miner Centamin Egypt, with significant operations in the region, reversed a loss of more than 5 per cent to gain 6.4 per cent.

Anglo American, which is due to report earnings on February 18th, added 3.4 per cent after De Beers, the world’s largest diamond producer, returned to profit.

Anglo American said it would post underlying earnings of $302 million for the year from its investment in De Beers.

Energy heavyweight BG rose 3.5 per cent, hitting an all-time high during the session, with traders citing technical factors and its MA potential.

“We like their outlook for next year and yield. They do continually have takeover speculation. I think the portfolio and exposure to Brazil makes them very attractive to the majors,” Martin Dobson, head of trading at Westhouse Securities, said.

Oil explorer Tullow Oil rose 3.8 per cent as Deutsche Bank and Barclays Capital upped their respective target prices on the stock, following an oil discovery at one of its interests in Ghana on Thursday.

Banks rebounded as risk appetite returned and investors shrugged aside European debt worries.

Lloyds Banking added 1.6 per cent, while Barclays pared losses somewhat ahead of results due on Tuesday.

Insurer Legal General rose 3.9 per cent on a bullish note from Nomura, which lifted its price target.

Concerns over the outlook for retailers saw Next, Marks Spencer and Kingfisher among the top fallers on London’s blue chip index, down 0.5-3.1 per cent. – (Bloomberg)