Miners to the fore as hot streak continues

LONDON FTSE 100 CLOSE 5,948.30 +16.13

Miners powered the FTSE 100 to its best streak in seven months yesterday, offsetting losses by retailers to complete a sixth successive session of gains.

The index has risen 6 per cent since its year-low of 5,591.59 on 15 March, rebounding from sharp falls after Japan's earthquake, political trouble in the Arab world and European debt worries.

Colin McLean, managing director of Scottish Value Management in Edinburgh, said: "The updates companies have been giving investors since the oil price picked up have indicated that price can be passed on and that demand is holding up."

He said industrials, tech stocks and chemicals producers look well-placed for further gains.

Miners, now trading above their 20-day and 50-day moving average, led the market as investors refocused on stocks that provide hopes for earnings growth.

British-Australian miner Rio Tinto was up after it increased its stake in bid target Riversdale to 41 per cent.

Rio Tinto, which is seeking to get shareholder support for its $3.9 billion (2.4bn) bid for the Mozambique-focused steel- making coal miner, saw shares rise 44p to 4,410p.

Vedanta Resources was ahead 76p at 2,314p, with traders citing a bullish note from Morgan Stanley - in which the broker says the miner's industry-leading growth is not recognised by the market - while BHP Billiton advanced 34.5p to 2,449p.

British Gas-parent Centrica saw shares lift 8.1p to 3,30.7p as it signed a contract with Aberdeen's Plexus Holding for the supply equipment needed for five exploration wells in the Norwegian North Sea.

But retailers were mostly down yesterday after a profit warning from the owner of Currys and PC World hit the sector in general. FTSE 250 firm Dixons Retail saw shares plunge 18 per cent as it revealed sales declines in the UK and Ireland worsened to 11 per cent since Christmas and said it was considering pulling out of Spain. Its shares fell 3p to 13.7p.

The warning, coming just two months after Dixons last lowered expectations, was perceived by investors as shining a spotlight on the troubled high street

Comet parent Kesa Electricals dropped 7p to 124p, while Home Retail Group, which owns Argos and Homebase, fell 8.5p to 192.9p.

In the top tier, Marks & Spencer was the biggest faller with a 10.6p drop to 340.7p, while Next was not far behind as it lost 54p to 2,011p.

Once again, luxury group Burberry bucked the trend as it continued to benefit from a broker note citing it as a takeover target.Shares were ahead 23p at 1,185p.

There was little cheer offered by the results of a survey from the CBI which revealed that high street trading grew in March compared with a year ago and at a faster rate than last month, but the group also warned sales growth still remained subdued.

But the slight improvement boosted the pound, which was up against the dollar at $1.60 and the euro at €1.13.

Glasgow-based Weir Group was among industrial stocks that benefited from an upbeat note on the sector from RBC Capital Markets. It was up 21p to 1,724p.