Commodities give FTSE welcome lift

LONDON FTSE 100 CLOSE 5,350.58 +30.55

COMMODITIES stocks were on the rise yesterday, giving the Footsie a boost despite investor anxiety ahead of today's crunch meeting over eurozone debt.

French president Nicolas Sarkozy will meet German chancellor Angela Merkel in Paris to discuss further steps to alleviate the crisis, though one mooted remedy - the creation of common euro area bonds - is not on the agenda.

Atif Latif, director of trading equities and derivatives at Guardian Stockbrokers, said: "If there can be an agreement allowing greater fiscal co-ordination then the market should take this as a positive.

"The market needs some clarity for investor confidence."

The FTSE 100 index closed up 0.6 per cent or 30.55 points at 5,350.58, having hit an intra-day high of 5,377.23 after Google's proposed 7.7 billion takeover of smartphone maker Motorola Mobility gave Wall Street a boost in early trading.

Oil was up $1 to $109 - having posted a third straight week of losses on Friday - supported by hopes that European leaders will come up with solutions to the continent's debt crisis.

BP added 11.8p to close at 416.7p while Falkland Islands-focused pair Rockhopper and Desire jumped after both issued positive messages about their estimated oil reserves in the South Atlantic. Rockhopper was up 19.25p, or 8.8 per cent, at 237p while Desire rose 2.25p, or 13.2 per cent, at 19.25p.

Scottish oil stocks were also on the front foot, with Faroe Petroleum up 14p or 10.3 per cent at 150p after the Aberdeen-based explorer said it had begun drilling its "Butch" exploration well in the Norwegians sector of the North Sea.

Fellow Aberdeen-based firm Xcite Energy was up 4.25p or 3.3 per cent at 133.5p, while Edinburgh-based Bowleven jumped 6.5 per cent or 8.75p to 143.75p as it continued to recover from heavy losses in recent weeks.

Miners also joined in the commodities rally, with Kazakhmys up 35p at 1,050p and Vedanta rising by 22p to 1,425p

Banks continued to struggle though after last week's rumours over the health of France's economy and its banks in particular.

The sector was hit by weekend reports that the Independent Commission on Banking will recommend a ring-fence between the investment and retail businesses, despite pressure from the banks for the suggestion to be softened.

Barclays posted a fall of 3.9p to 183.4p, HSBC lost 4.6p at 547.2p, Lloyds dropped 0.5p to 33.2p and Royal Bank of Scotland fell 0.3p to 26.2p.

Spectris was a notable riser after it unveiled a major move into the US with the $475 million (291m) acquisition of precision tool maker Omega Engineering. Omega specialises in tools that measure and control temperature, pressure, humidity and conductivity and made profits of about 24m in 2010.

Chief executive John O'Higgins said the deal brings a "significant strategic growth platform" to Spectris. Shares rose by 58p to 1,407p.Tindle Newspapers bought a further 2.3 million shares in Johnston Press - publisher of The Scotsman, Scotland on Sunday and the Edinburgh Evening News - to take its holding to 3.28 per cent. Shares in Johnston Press closed up 0.22p at 5.39p.