FTSE rises again on back of shares in raw materials

FTSE:5,863.16 (+8.15) Mid-250:11,996.93 (+24.27) Small Cap:3,275.19 (-11.99)

UK STOCKS rose for a second day yesterday as gains among raw-material companies outweighed declines at International Consolidated Airlines Group.

Glencore International climbed 2 per cent as Deutsche Bank advised buying the stock. Anglo American led commodities shares higher as copper rallied in London. IAG, Europe’s third-biggest airline, fell 3 per cent as Goldman Sachs advised reducing holdings of travel and leisure shares.

A report yesterday from the Engineering Employers Federation showed UK factory production strengthened in the second quarter as companies benefited from increasing export orders.

Anglo American gained 1.5 per cent to 2,984 pence. Rio Tinto was up 1 per cent to 4,148p. Copper and lead prices rose on the London Metal Exchange. Glencore climbed 2 per cent to 515p. Deutsche Bank said shares of the world’s largest listed commodity trader were undervalued as it issued a “buy” recommendation.

Aegis Group rallied 6.9 per cent to 151p after the London-based media services company said it has held talks about selling its market-research unit Synovate to Ipsos. Synovate could fetch £450 million to £580 million (€504 million-€649 million), analysts from Exane, BNP Paribas and Panmure Gordon said.

IAG slid 3 per cent to 229.6p as the International Air Transport Association cut its 2011 industry profit forecast by 54 per cent because of higher oil prices, revolts in the Middle East and north Africa and the earthquake in Japan.

Cruises firm Carnival shed 0.8 per cent, while tour operator TUI Travel lost 1.1 per cent, adding to the possibility that it could be demoted from the FTSE 100 index when the quarterly reshuffle is announced tomorrow.

IMI climbed 1.7 per cent to 1,038p as Citigroup rated shares of the engineering firm among its “top pick” of UK engineers.

HMV soared 49 per cent to 12.3p, its largest one-day gain on record, as the Sunday Timesreported that the UK's biggest CD and DVD retailer would soon agree a two-year refinancing plan valued at about £210 million (€235 million). – (Bloomberg)