A ROBUST production update by BHP Billiton put the mining sector on the front foot yesterday while the latest comments from the Fed also improved traders’ appetite for risk.
Investors took heart as US Federal Reserve chairman Ben Bernanke raised the prospect of more economic stimulus for the world’s biggest economy despite evidence it is already growing at a respectable pace.
Brenda Kelly, senior market strategist at IG, said: “Investors may now feel that a lot of the bad news in relation to global growth has been discounted and thus the more risky mining sector is becoming more attractive.”
London’s heavily weighted miners helped the FTSE 100 index close up 15.58 points at 6,571.93, having earlier fallen into negative territory after the Bank of England’s interest rate meeting minutes dashed investor hopes of more money printing in the UK.
BHP Billiton rose 2 per cent or 36p to 1,868p on record annual iron ore production. Coming on top of a bullish update from rival Rio Tinto the previous day, other miners were also given a lift. Glencore Xstrata climbed 7.4p to 271.95p and Fresnillo gained 26p to 1,042p. Rio Tinto added 32p at 2,915p.
A profit warning from engineering firm Smiths Group knocked its shares by as much as 5 per cent in early trading, but they recovered some of their losses to close down 14p at 1,377p.
In the FTSE 250 index, transport firm FirstGroup edged up 0.5p to 92.85p after saying recovery efforts were starting to bear fruit. While it admitted there remains “significant work to do” to get back on track, the Aberdeen-based firm reported rises in like-for-like passenger revenues at its UK bus division and its rail operations.
NEW YORK: Wall Street edged higher last night after Federal Reserve chairman Ben Bernanke said the timeline for winding down the US central bank’s stimulus programme was not set in stone.
The Dow Jones industrial average closed up 18.67 points, or 0.12 per cent, at 15,470.52 while the broader Standard & Poor’s 500 Index was up 4.65 points, or 0.27 per cent, to finish at 1,680.91. The Nasdaq Composite Index was up 11.50 points, or 0.32 per cent, closing at 3,610.00.