Reuters: London’s FTSE 100 share index rose in early trade on Monday, led by index-heavyweight oil shares as oil prices climbed on the back of rising tensions over Iran’s nuclear ambitions, with corporate results also lending support. By Dominic Lau
LONDON (Reuters) – London’s FTSE 100 share index rose in early trade on Monday, led by index-heavyweight oil shares as oil prices climbed on the back of rising tensions over Iran’s nuclear ambitions, with corporate results also lending support.
Mining shares were also in demand as copper prices rose 0.9 percent to $6,328 a tonne, having fallen last week on weaker copper and nickel prices and after Anglo American disappointed investors with a $3-billion share (1.53 billion pounds) buyback plan, smaller than the $4 billion which had been predicted in media reports.
BHP Billiton tacked on 0.4 percent, Xstrata climbed 1.1 percent, Kazakhmys gained 1.8 percent and Rio Tinto put on 1.1 percent.
Oil stocks gained as crude prices rose for a fourth day, nearing a fresh 2007 high above $61 a barrel.
BP rose 1.6 percent and Royal Dutch Shell added 0.7 percent.
At 9:15 a.m. the FTSE 100 was up 31.2 points, or 0.49 percent, at 6,432.8 points. European share indexes also inched higher, while Japan’s Nikkei ended at its highest level in almost seven years.
“Mining stocks suffered a little bit of weakness over recent days on disappointment that maybe they could have returned a bit more money in the case of Anglo American. The market has recovered from its disappointment,” Keith Bowman, equity analyst at Hargreaves Lansdown.
“We also had some results this morning which look to be broadly well-taken,” he said.
Persimmon gained 3.5 percent, topping the gainers’ list after the country’s biggest house builder posted a 17.5 percent rise in year pretax profit and said that it had not experienced any loss of buyer confidence after a surprise January interest rate increase.
Associated British Foods also featured on the upside, up 3.4 percent after it said profits were in line with expectations with growth more weighted to its second-half.
TXU DEAL TALK BOOST
Shares in International Power gained 2.8 percent, buoyed by media reports that private equity firms Kohlberg Kravis Roberts & Co and Texas Pacific Group were acquiring Texas power company TXU Corp. .
“The TXU bid in the U.S. gives more focus on them as a possible bid target again,” a trader said.
BSkyB shed 0.4 percent after the pay TV firm said its annual operating profit would take a hit of up to 20 million pounds if it failed to reach a deal for its basic channels to be shown on rival Virgin Media .
Old Mutual climbed 2.1 percent after it met forecast with a 22 percent rise in 2006 opearting profit, but said exchange rates and investment in Europe, Sweden and South Africa would hold back earnings growth in 2007.
Hammerson added 0.4 percent after its net asset value rose 21.3 percent last year, helped by steady growth in retail income and higher valuations of offices and development projects.
