Footsie closes in on key 6,000 mark

A STRONG run for mining stocks helped the FTSE 100 Index push above the 5,950-mark yesterday for the first time since June 2008.

The London market closed up 60.19 points, or just over 1 per cent, at 5,951.8 - despite a warning from credit ratings agency Moody's that it may lower Portugal's rating. The blow comes just days after a similar move by the credit ratings agency on Spain.

Ben Critchley, senior sales trader at IG Index, said: "The Santa rally built up a head of steam all day long and finally the FTSE 100 index managed to decisively clear the 5,900-level, which had stemmed rallies over the past week.

"There has been nothing to puncture the feel-good factor for markets in recent days, leaving traders eyeing up the psychological 6,000-mark on the FTSE as the next target."

The pound fell against the dollar at $1.54 and was down against the euro at €1.17 after UK public finance figures came in much worse than expected at 23.3 billion in November - a monthly record.

But higher metal and oil prices boosted commodity stocks, while banking giants also made decent gains following a poor run sparked by fears of European debt contagion. Royal Bank of Scotland finished at the top of the risers' board, up more than 4 per cent or 1.7p to 40.2p, while Barclays added 7.4p to 268.4p. Lloyds, which spooked investors on Friday after it highlighted the impact of Ireland's mounting debt crisis on its books, also made headway, up 1.6p to 68.5p.

Miners likewise dominated the risers' board, with Anglo American up 131p to 3,272.5p, Xstrata up 51p to 1,506p and Eurasian Natural Resources ahead 31.5p to 1,031p.

Rolls-Royce gained 13p to 650p after the European Aviation Safety Agency said it was set to relax inspection rules imposed on its Trent 900 engines. The rules were set last month after a Trent 900 on a Qantas A380 superjumbo blew apart on take-off from Singapore.

But thin trading volumes in the lead up to the Christmas holidays were also thought to be behind yesterday's volatility.

The surge came despite news of more woes in the retail sector after small cap stock Alexon - the owner of the Ann Harvey, Dash and Kaliko brands - issued a profits warning following snow-hit sales.Alexon's shares plummeted 18 per cent or 2.8p to 12.3p.

The figures confirmed the problems experienced by retailers across the country as snow and ice keeps shoppers away from stores in what should be the busiest week of the year.

Blue-chip retailers were also down, with Marks & Spencer dropping 2.9p to 370p and Next off 4p at 1,964p.

But grocers pulled back from Monday's declines, with Tesco ahead 1.2p at 431.3p, Sainsbury's advancing 2.9p at 376.1p and Morrisons up 1.9p at 266.5p.

BT dropped after the communications watchdog issued a "statement of objections", setting out its view that BT has infringed competition law in relation to the pricing of its wholesale calls product between July 2008 to April 2009.

BT denied the claim and said it would co-operate with Ofcom's investigation. Shares fell 1.3p to 185.8p.