Strong US data and some lively performances over the Easter weekend from Asian and US stocks were expected to keep the London equity market supported for most of Tuesday’s session.
Closed on Good Friday and Easter Monday, Tuesday was the first time London’s FTSE indices had chance to react to US non-farm payrolls data published on Friday, which had driven rallies across Asia and on Wall Street on Monday.
By mid morning, the FTSE 100 was up 38 points or 0.7 per cent to a fresh 21-month high of 5,782.62. The FTSE 250 added 1 per cent to 10,411.88.
Petrofac, the oilfield services company, moved from the bottom to the top of the FTSE 100 leaderboard on its first trading day after the demerger of its oil and gas assets into a spin-off company called EnQuest.
The share split left the new Petrofac shares up 4.7 per cent to £12.44, and EnQuest shares trading at 107.4p each.
Miners were mostly higher, with Xstrata up 2 per cent to £13.26 after announcing its final pricing deal for supply of thermal coal to a big Japanese power generator at an 11.5 per cent premium over spot prices.
Fraser Jamieson at JPMorgan said: ”The premium over spot is slightly larger than previous settlements, which perhaps reflects a recognition from Japanese users of the need to pay up to secure supply in a market where China is becoming a more significant player.”
Meanwhile, Credit Suisse remained upbeat on the sector, saying that in spite of the robust rally in mining stock over the past year, it was still too early to call a peak in the price/earnings ratio.
”We believe it is too early to call the peak in the earnings cycle at this stage in the global recovery,” it said.
”Sector earnings and margins have rebounded strongly from the lows in 2009 but remain below the previous peak in 2007-08.”
Vedanta Resources rose 1.9 per cent to £29.18, while Kazakhstani rivalsEurasian Natural Resources and Kazakhmys climbed 2.5 per cent to £12.55 and 2.4 per cent to £16.20 respectively.
Banks were in focus after Gordon Brown, UK prime minister, said that big financial centres were now close to agreeing a global tax on banks that would help prevent future dislocations in the system that led to the financial crisis.
Part-nationalised Royal Bank of Scotland and Lloyds Banking Group were up 1.7 per cent to 45.4p and 1.4 per cent to 65.1p respectively.
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