Footsie mines more upward impetus

LONDON'S Footsie ended a buoyant week with its fourth winning session in a row yesterday as mining stocks continued their recent push higher.

The benchmark FTSE 100 index finished 27.49 points up at 5,132.94 and has now advanced more than 6 per cent since Monday's close amid slowly recovering risk appetite among investors.

In a quiet day for corporate news, a combination of broker upgrades, improved sentiment and higher metal prices underpinned gains.

Fears of UK recovery being choked off by rate hikes were lifted when factory gate prices slowed more than expected in June, reducing the pressure for tightening to control inflation.

Markets overlooked poorer data on the UK goods trade gap, which widened to 8.1 billion in May amid little sign of help from a weaker pound.

Sterling stood just below $1.51 against the dollar and €1.19 against the euro. The single currency has strengthened in recent days as confidence over the eurozone picks up.

Michael Hewson, analyst at CMC Markets, said: "It's been a somewhat subdued end to a week of impressive gains in European equity markets with indexes trading positively, but with attention inevitably focused on the start of United States' (second quarter] earnings season, which starts next week."

Mining firm Antofagasta was the top flight's best performer, gaining 34.5p or 4 per cent to 886p as Citigroup brokers upgraded it to a "buy" rating.

BT Group was also on the front foot after the telecoms giant reached a deal with union leaders for an "unprecedented" three-year pay rise worth more than 9 per cent.

While the City estimated the deal could cost around 50 million extra a year by 2013, the deal averted the threat of a costly strike by workers and helped shares to rise 4p to 140p.

Medical instruments firm Smith & Nephew was also in demand amid vague bid gossip in a quiet session. Shares added 23p to 607p.

One of the biggest falls in the top flight was posted by National Grid after analysts at Citigroup removed their "buy" rating on Thursday and said the utility may sell its US business in order to protect its dividend. Shares, which were flat on Thursday in a strong market, fell 7.1p to 494.9p.

In the FTSE 250 Index, shares in roofing and insulation firm SIG rose 2.4p to 106.9p after it forecast better-than-expected half-year profits due to a recovery in sales over the second quarter of the year. Engineering firm Bodycote set the pace in the second tier after it said it was on course to exceed market forecasts for full-year operating profits. Shares were 14 per cent higher, up 26.9p at 217.6p.

Elsewhere. shares in recruitment firm Michael Page International lifted 7.6p to 393.4p after growth in Asia helped boost second quarter profits.

Bovis Homes shares were up 5.7p to 354.5p after announcing plans to restore its dividend at the end of its current financial year.

A solid trading update from Bovis was overshadowed by a cautious assessment of the sector by broker HSBC. The review caused Bellway to fall by 12p to 612p and rival Redrow to slip 3.5p to 109.8p.z