Miners prop up footsie as banks buckle on Greek debt concerns

FTSE: 5,881 (+ 10.85) Mid-250: 11,841 (+ 15.77) Small Cap: 3,251 (+ 19.370):STRENGTH IN heavyweight mining stocks helped Britain's top share index edge higher yesterday, countering slippage by banks on euro zone debt concerns.

At the close, the FTSE 100 was up 10.9 points, or 0.2 per cent at 5,880.99, well below a morning spike above the psychologically important 5,900 level to 5,910.77. Miners provided the main prop for the FTSE 100 as investors returned to the sector on hopes of a reverse of the flow of funds largely out of mining and other stocks in the recent IPO of commodities trader Glencore.

Antofagasta was a top blue chip gainer, up 3.5 per cent, as the Chilean copper miner posted a 30 per cent rise in quarterly core earnings, helped by higher prices.

Tobacco stocks were also in demand, led by a 1.3 per cent rise in British American Tobacco which agreed to buy privately owned Productora Tabacalera de Colombia, the second largest cigarette company in Colombia, for $452 million.

Banks were the worst blue-chip performers, with part-nationalised Royal Bank of Scotland shedding 1.1 per cent and global heavyweight HSBC down 0.4 per cent as worries over euro zone sovereign debt failed to dissipate.

Concerns about Greek fiscal woes were reignited after Eurogroup president Jean-Claude Juncker said if payment of the IMF tranche to Greece in June was not possible, the Europeans were expected by the IMF to step in.

Lloyds Banking Group, however, bucked the weaker sector trend, up 1.1 per cent as Virgin Money stepped up its bid interest in 600 retail branches which the British bank has been ordered to sell by regulators.

By London’s close, US blue chips were down 0.4 per cent on the renewed euro-zone worries and as the US economy grew at a slower-than-expected pace in the first quarter, with GDP unrevised at up 1.8 per cent.

Engineer Weir Group was the top FTSE 100 gainer, up 5.3 per cent as RBS raised its target price to 2,125 pence from 1,935 pence to reflect the firm’s recent bullish interim management statement. Burberry was the biggest blue-chip faller, down 4.6 per cent, retreating after a strong recent run following full-year results. The company said its operating margin would probably fall in the first six months of the fiscal year. – (Reuters)