THE Footsie hit a three-week high amid optimism that a deal will be reached in the United States to avoid January’s “fiscal cliff”, when tax rises and spending cuts threaten to cripple the world’s largest economy.
The FTSE 100 index climbed 67.02 points or nearly 1.2 per cent to end the day at 5,870.3, its highest close since 3 November.
David Madden, market analyst at IG Index, said: “Wednesday’s comments from US President Barack Obama that a deal will be in place by Christmas have filled investors with confidence that the US economy will not plunge into a recession come new year.”
The heavily-weighted mining sector drove the Footsie higher after Rio Tinto told an investors seminar that it would reduce costs and sell off further assets to compact falling commodities prices. Rio closed up 5.1 per cent or 149.5p at 3,090p. Fellow mining giant BHP Billiton was up 36.5p or 1.9 per cent at 1,970.5p after positive comments from its chief executive at its AGM, while peers Kazakhmys and Antofagasta were up 6 per cent or 40.5p at 719p and 4.3 per cent or 53p at 1,292p respectively.
Aberdeen-based energy services firm Wood Group missed out on the FTSE 100 rally after members of the Wood family and their trust sold all their shares, pushing the stock down 4.3 per cent or 35p to 780p. But analysts at Oriel Securities described the sale as a good “buying opportunity” for investors.
Fellow North-east firm FirstGroup motored ahead by 3.2 per cent or 5.8p to 187p after Nomura upgraded the bus and train operator to “neutral”.
Engineering firm Invensys topped the FTSE 250 risers’ board – up 8.9 per cent or 25p at 305p – a day after selling its rail business to German peer Siemens for £1.7 billion.
NEW YORK: Wall Street ended higher last night as investors bought on sporadic dips in a market roiled by conflicting comments from Washington about high-stakes negotiations to avoid the “fiscal cliff.”
The Dow Jones industrial average rose 36.71 points, or 0.28 per cent, to end at 13,021.82 while the Standard & Poor’s 500 Index added 6.02 points, or 0.43 per cent, to finish at 1,415.95. The Nasdaq Composite Index gained 20.25 points, or 0.68 per cent, to close at 3,012.03.