Quietness is golden for base metals

LONDON FTSE 100 CLOSE 6,055.75 +48.38

THE Footsie notched up a third week of gains and its highest close since mid-February after rising metals prices and deal-making boosted miners.

London's FTSE 100 ended up 0.8 per cent or 48.38 points at 6,055.75 - but volumes were low, at around two thirds of the index's 30-day average, with volatility in a tight range and many traders on the sidelines ahead of the weekend.

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Michael Taylor, a futures trader at Cantor Fitzgerald, said: "It's been very, very quiet. Volatility has been very low, with not much in the way of fresh macro-economic figures out to drive direction."

Strength in mining shares underpinned the rally, Taylor added, led by gains in the value of most metals - with gold at a record high of $1,474 an ounce, silver at a 31-year peak and base metals like copper also bullish.

Supply concerns lifted Brent crude to a 32-month high of $125 a barrel.

David Jones, chief market strategist at IG Index, added: "The oil price has to be something of a headache for the Bank of England and will do UK inflation no favours in the months ahead - but, as far as shares are concerned, investors have started the quarter with a healthy risk appetite and seem happy to position themselves for the potential of more gains to come."

The commodities rally also affected currency markets by weakening the dollar. The pound was up to $1.64 but down to €1.14 against the euro, which gained strength following the decision by the European Central Bank to raise interest rates from 1 per cent to 1.25 per cent.

Miners and energy companies dominated the top flight risers board, with Anglo American the biggest winner, up 4 per cent, or 125p to 3,344p.

Rio Tinto was also up 139p to 4,524p after it completed a deal to gain control of Australian coal miner Riversdale. Energy giant BP was up 3.6p to 478.5p despite its failure to overturn the attempted block on its tie-up with Russian state-backed oil firm Rosneft.

In contrast, travel and leisure companies suffered as traders feared the high oil prices could have further implications for their profit margins.

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Cruise ship company Carnival was down 69p to 2373p, while Thomson and First Choice owner TUI Travel dropped 1.4p to 233.4p and British Airways-owner International Consolidated Airlines Group was down 5.6p at 217.4p.

A broad-based rally for London's shares saw gains for insurance pair Prudential and Aviva - up 14.5p at 748p and 4.8p to 452.1p respectively.There was also an improvement for retail stocks after the latest weekly sales report from John Lewis showed sales excluding VAT rose 1.4 per cent in the seven days leading up to Mothering Sunday.

Risers included Next, which lifted 18p to 2,070p, while Marks & Spencer added 2.7p to 359.6p.

JD Sports Fashion proved the exception ahead of its results next week, falling 2 per cent or 22p to 875.5p, making it one of the biggest fallers in the FTSE 250 Index.

Elsewhere in the second tier, housebuilders were also under pressure after Bovis Homes declined 7.6p to 423.6p and Barratt Developments slipped 0.9p to 108.1p.