FTSE 100 rises 0.97%
Wednesday, 20 Aug 2008 17:31
Miners hold up flagging FTSE
The FTSE 100 closed up 0.97 per cent today to 5,371.80 – standing firm against yesterday's US-led losses.
In New York, the Dow Jones and Nasdaq both picked up rising 0.36 per cent and 0.45 per cent in early trading.
In London it was the miners again which returned to provide a meaningful backbone for the index.
Rio Tinto rose 7.43 per cent, Antofagasta was up 7.33 per cent and Eurasian gained 6.98 per cent.
Tullow Oil climbed 6.84 per cent and BHP Billiton rose 6.71 per cent.
Heading the losers was BT, falling 6.77 per cent, while fellow telecoms giant Cable & Wireless dropped 3.14 per cent.
Sainsbury was down 3.67 per cent, Barclays fell 2.85 per cent and Thomas Cook dropped 2.70 per cent.
Tim Hughes, head of sales trading at IG Index, explained traders are caught between being buoyed by rising commodity prices and gloomed by their inflationary effects.
"Mining stocks rose this morning as metals prices gained, while commodity-based firms including Tullow Oil also increased," he said.
"However, concerns about inflation continue to dog the US and UK markets, with increased fuel costs adding to inflation woes over recent months – understandably, uneasy investors watching the rise in oil prices have responded this afternoon."
Looking forward he claimed the coming months seemed unlikely to yield many positives for the financial markets as volatile conditions look set to continue.
"Although there is still the chance of the FTSE clawing back some of the losses made since the start of the year. 'Choppy' has been the word of the week – or month – so far, with investors' optimism inevitably tempered by rising oil, negative banking sector news, and the shadow of rising inflation."