Market Report: Miners, led by Xstrata, help get the FTSE flying

Judging by the comments of some in the Square Mile, a tie-up between Xstrata and Glencore appears to be virtually inevitable. Yet not everyone is convinced a merger is imminent, including Nomura which yesterday claimed Xstrata was more likely to be on the lookout for acquisitions itself than be taken over.

Despite constant talk over a possible deal between the two, scribblers from the Japanese broker argued that there was a better chance of the Swiss miner becoming "a predator [rather] than prey". They also added that an approach from its 34.5 per cent shareholder Glencore "in the short term is unlikely", while claiming the controversial commodities trader might find "better value" in chasing other targets.

Although they played down the bid talk, the analysts still kept Xstrata as one of their top picks in the sector in a generally bullish note on the heavyweight diggers. Arguing that the recent collapse in mining stocks had been overdone, they said the miners were "already pricing in further falls" in commodity prices while claiming valuations had dropped to levels last seen during the financial crisis.

The support helped Xstrata advance 39.6p to 948.3p, as Vedanta Resources and Kazakhmys ticked up 66.5p to 994.5p and 52.5p to 857.5p respectively. Glencore's move, however, was limited to a rise of 10.6p to 384.4p, with the analysts saying it and ENRC (up 32.5p to 633p) were "relatively expensive versus [their] peers".

Overall, the FTSE 100 managed to kick on from Friday's rise – the benchmark index's first positive day after nine consecutive sessions on the slide – by powering up 148.11 points to 5,312.76. Although the International Monetary Fund (IMF) denied reports from Italy claiming it has been preparing a €600bn bailout package for the country, markets around the world instead focused on plans for a fiscal union being prepared by France and Germany.

The banks were continuing their recent attempts at a recovery, including Royal Bank of Scotland which was bumped up 1p to 19.74p. The group was the subject of vague speculation that it may close its equities desk amid reports claiming it has already been reducing the operations, although City voices treated the whispers with scepticism.

Barclays was the sector's top performer, bumped up 12.2p to 167.85p after Evolution's Ian Gordon kept his "buy" rating on the company. In a research note in which the analyst, rather surreally, took the opportunity to call for the London cycle lanes the bank sponsors to be re-routed over safety concerns, he argued that Barclays' "clear defensive credentials continue to be under-recognised and under-rewarded" by investors.

There was just one blue-chip stock in the red, although that didn't stop it being rather a large fall. Randgold Resources slumped 535p to 6,240p – a move of almost 8 per cent – after slashing its production target, which the gold miner blamed on a number of factors including mechanical problems at its Tongon mine in Ivory Coast.

Punters decided to concentrate on the news that the beleaguered Thomas Cook had managed to secure a £200m facility with its banks rather than the tour operator's admission its recent woes have scared off customers.

The group, which has launched a marketing campaign in an attempt to attract holidaymakers, was driven up 20.59 per cent to 21.73p and the top of the FTSE 250 risers, although it remains more than 50 per cent lower than before last week's announcement that it needed more cash.

The shock resignation of its chief executive Peter Hill because of ill health failed to prevent Laird climbing 8.5p to 140.3p, as the electronics company revealed it was still on track to meet its full-year earnings expectations.

The US group Anadarko provided a massive boost for Cove Energy after more than doubling its estimates for the natural gas fields off the coast of Mozambique in which both have a stake. The oil giant said it now believed the fields had recoverable reserves of between 15 and more than 30 trillion cubic feet (tcf), having previously expected "at least" 10 tcf.

As a result, Alternative Investment Market-listed Cove – recently the subject of vague speculation it could become a bid target – jumped up 8.25p to 87.5p, while the numerous energy companies now operating off the coast of east Africa also received a fillip, including BG Group which climbed 53.5p to 1,298.5p on the top-tier index.

Patsystems charged forwards 29.87 per cent to 12.5p after revealing it had received a potential offer. The AIM-listed trading software company, hit hard by the collapse of its largest customer MF Global, has seen its share price drop by more than a half since the start of October, prompting its largest stakeholder ION Trading to make an approach worth 14p a share.

FTSE 100 Risers

l Weir Group 1,943p (up 148p, 8.25 per cent) Engineer grabs pole position on the top-tier index after Barclays Capital's analysts change their price target to 2,500p from 2,350p.

l Lloyds Banking Group 23.68p (up 0.49p, 2.09 per cent) Having previously shed close to a quarter of its share price in eight consecutive sessions on the slide, bank manages to climb for the third day in a row.

FTSE 100 Fallers

l Imperial Tobacco 2,266p (up 12p, 0.53 per cent) Cigarette manufacturer – whose brands include Davidoff and Lambert & Butler – sees a tiny climb after investors choose to focus on less defensive stocks.

l Smith & Nephew 565p (up 10p, 1.8 per cent) Prosthetics manufacturer underperforms the rest of the blue-chip index, having previously managed to shed over 6 per cent in less than a fortnight.

FTSE 250 Risers

l Home Retail 79.5p (up 3.35p, 4.4 per cent) Homebase and Argos-owner ends the session ahead despite analysts from Citigroup deciding to reduce their target price to 60p from 80p.

l ITE Group 184.7p (up 2.8p, 1.54 per cent) Exhibition and conference organiser, which is set to update the market today with its preliminary results, rises after announcing acquisition of Autoexpo.

FTSE 250 Fallers

l De La Rue 904.5p (down 31.5p, 3.37 per cent) Investors in banknote printer decide to bank profits, in the wake of the company having added nearly 7 per cent over the previous four sessions.

l RPS 179.1p (down 0.5p, 0.28 per cent) Engineering consultant slips back after being hit by Numis Securities downgrading its target price to 227p from 294p, although broker keeps its "buy" advice.

Start your day with The Independent, sign up for daily news emails
Sport
Brendan Rodgers is confident that Sterling will put pen to paper on a new deal at Anfield
footballLIVE: Follow all the latest from tonight's Capital One quarter-finals
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
PROMOTED VIDEO
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Life and Style
tech
News
Not quite what they were expecting
news

When teaching the meaning of Christmas backfires

Arts and Entertainment
Angelina Jolie and Sony Pictures co-chairman Amy Pascal at the Golden Globes in 2011
film
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Ashdown Group: Java Developer - North West London - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Selby Jennings: Corporate Communications & Marketing Specialist – Geneva

120,000 - 150,000 chf + bonus: Selby Jennings: A leading Swiss Private Banking...

Day In a Page

Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum
France's Front National and the fear of a ‘gay lobby’ around Marine Le Pen

Front National fear of ‘gay lobby’

Marine Le Pen appoints Sébastien Chenu as cultural adviser
'Enhanced interrogation techniques?' When language is distorted to hide state crimes

Robert Fisk on the CIA 'torture report'

Once again language is distorted in order to hide US state wrongdoing
Radio 1’s new chart host must placate the Swifties and Azaleans

Radio 1 to mediate between the Swifties and Azaleans

New chart host Clara Amfo must placate pop's fan armies
Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

Homeless Veterans appeal: 'It's life, and not the Forces, that gets you'

The head of Veterans Aid on how his charity is changing perceptions of ex-servicemen and women in need
Torture: It didn't work then, it doesn't work now

Torture: It didn't work then, it doesn't work now

Its use is always wrong and, despite CIA justifications post 9/11, the information obtained from it is invariably tainted, argues Patrick Cockburn
Rebranding Christmas: More public bodies are refusing to give the festival its name for fear of causing offence

Rebranding Christmas

More public bodies are refusing to give the festival its name for fear of causing offence. They are missing the point, and we all need to grow up
A Greek island - yours for the price of a London flat

A sun-kissed island - yours for the price of a London flat

Cash-strapped Greeks are selling off their slices of paradise
Pogues could enjoy fairytale Christmas No 1 thanks to digital streaming

Pogues could enjoy fairytale Christmas No 1 thanks to digital streaming

New system means that evergreen songs could top the festive charts
Prince of Wales: Gruff Rhys on his rock odyssey, and the trouble with independence

Prince of Wales: Gruff Rhys

He is a musician of wondrous oddity. He is on a perpetual quest to seek the lost tribes of the Welsh diaspora. Just don't ask Gruff Rhys if he's a national treasure...