Gains in mining stocks drive Footsie forward while retailers lose ground

FTSE: 5,856.34 (+47.45) Mid-250: 11,911.62 (+40.70) Small Cap: 3,286.05 (+17.69)MINERS REBOUNDED from the previous day's sharp sell-off to help push Britain's top share index higher yesterday, while oil stocks tracked crude higher on supply fears.

The FTSE 100 closed up 47.45 points, or 0.8 per cent, at 5,856.34.

Integrated oil stocks added the most points to the blue-chip index as crude rose $1.39 to $102.13, while miners also saw strong gains, led higher by a 2.5 per cent advance from Chilean copper miner Antofagasta.

A surprise narrowing of the US April trade deficit offered investors respite after a run of gloomy economic data, but the prevailing tone was one of caution, with a rise in US weekly jobless claims adding to fears the labour market has stalled.

“Really we’re heading into the summer now, and everything’s a problem for the markets,” David Morrison, market strategist at GFT Global, said.

“We’ve got problems in Europe with the debt crisis, the difficulties Japan’s still facing (post-earthquake), China is doing everything to slow things down and the foot’s coming off the pedal as far as the Fed’s concerned in terms of stimulus,” he said.

US blue chips were up 0.8 per cent at London’s close.

Weakness was seen on Britain’s high street after the UK’s biggest household goods retailer Home Retail reported a slump in first-quarter sales at its Argos chain, its shares fell almost 14 per cent.

J Sainsbury, scheduled to issue a trading update next week, dropped 1.2 per cent, while Marks Spencer slipped 0.9 per cent.

Both the Bank of England and the European Central Bank left interest rates on hold yesterday.

“There was a lot of talk that the ECB were going to put rates up by a ¼ of a per cent . . . If the euro zone were to go up a ¼ of a per cent, the concern was that the UK would have to follow suit sooner rather than later, and I think that would have worried the market, Yusuf Heusen, senior sales trader at IG Index, said.

But ECB president Jean-Claude Trichet did signal that rates would rise next month, saying that “strong vigilance” is needed, a phrase often used to signal a hike at the next meeting.

Among individual movers, Weir rose 4.8 per cent, topping the FTSE 100 leader board. Smiths fell 1.4 per cent.

Imperial Tobacco also dropped 1.4 per cent. – (Reuters)