FTSE mines strength from weak dollar

MINING groups were in favour yesterday amid the prospect of a weaker dollar after the meeting of G20 finance chiefs failed to offer any specific measures to strengthen the currency.

The meeting in South Korea of 20 major advanced and emerging nations resolved to avoid weakening currencies to boost exports - a scenario that could cause a trade war - but stopped short of setting any measurable targets.

A weaker dollar tends to boost demand for minerals and seven of the of the top ten FTSE100 risers were mining groups. Antofagasta was the biggest gainer, rising 52p to 1,321p, a rise of 4 per cent, while Kazakhmys added 47p to 1,380p and Xstrata lifted 34.5p to 1,324p.

Other climbers on the Footsie included luxury fashion house Burberry, which added 38p to 1,032p after broker Investec upgraded its share target price to 1,100p from 950p, and speculation of a bid for the firm continued after sector peer LVMH's bid for a 17 per stake in luxury brand Herms.

In a quiet session for corporate news, Pearson shares fell 3 per cent despite the Penguin, Financial Times and school books publisher lifting its earnings guidance for the second time in three months. The stock fell 28.5p to 947.5p as Pearson cautioned that the fourth quarter was a crucial selling season for its education and consumer publishing divisions.

Lloyds Banking Group bucked the trend of rising shares and topped the fallers board after Credit Suisse cut its 12-month target price for the stock to 79p from 87p and warned falling property prices could have an impact. Shares dropped 5 per cent or 3.9p to 68p.

It said the market's consensus forecast for 2011-12 revenues was 5 per cent too high and that a 10 per cent fall in residential property prices over an 18 month period could increase impairment charges by up to 5 billion.

The update also knocked Royal Bank of Scotland, which slipped 0.8p to 45.4p.

Outside the top flight, shares in McBride, which makes supermarket own-label products such as laundry liquids, mouthwash and toothpaste, rose 2 per cent after it announced a 1 per cent rise in sales between 1 July 1 to 24 October, even though chief executive Chris Bull admitted big brands were fighting hard for sales.

He said the promotional spree was not necessarily bad news for McBride as consumers would become accustomed to paying low prices for brands and when the average price increased again they would buy even more supermarket own label goods, which would offer better value for money.

The London Stock Exchange was pushed 5p higher to 740p by the bid by the Singapore Stock Exchange for the Australian Stock Exchange, suggesting that a new round of consolidation among stock market operators could be under way.Shares in North Sea explorer Xcite Energy were one of the of the day's biggest gainers outside the FTSE100, rising by 23 per cent to 174.5p after the company said it had reached target depth for the first part of its planned work programme on the Bentley field in the North Sea. The update revealed that operations have significantly increased the "volume of oil in place".