Mining stocks aid Footsie advance while BP gives up some ground

FTSE: 5,932.17 (+27.68) Mid-250: 11,636.37 (–1.02) Small Cap: 3,246.32 (–12.22)THE UK'S FTSE 100 Index climbed yesterday, as mining companies advanced, offsetting a sell-off in BP, Europe's second-largest oil company.

The FTSE 100 Index climbed 27.68, or 0.47 per cent, to 5,932.17 at the close in London after swinging between gains and losses more than 10 times.

The FTSE All-Share Index advanced 0.3 per cent. The benchmark gauge earlier dropped as much as 0.4 per cent after Standard and Poor’s lowered its credit rating for Greece and Portugal to BB- and BBB- respectively (BBB- is the lowest investment grade).

BP fell 2.2 per cent to 466.8p. This was the steepest drop since January as federal prosecutors in the US considered bringing manslaughter charges against some of the company’s managers for decisions made before the Gulf of Mexico oil rig explosion last year that killed 11 workers and caused the world’s biggest accidental offshore spill.

BHP paced a rally in mining shares as base metals pared losses on the London Metal Exchange. The world’s largest mining company gained 1.8 per cent to 2,405.5p.

Vedanta Resources increased 2.3 per cent to 2,226p and Rio Tinto climbed 1.5 per cent to 4,341.5p.

Separately, two people with knowledge of the matter said Rio Tinto was in talks to buy shares in Riversdale Mining from Brazil’s Cia Siderurgica Nacional (CSN).

CSN wants to keep its stake in Riversdale according to chief financial officer Paulo Penido, who was speaking on a conference call with analysts yesterday.

Wolseley climbed 2.6 per cent to 2,143p.

The world’s largest supplier of heating and plumbing products reported a 64 per cent rise in first-half earnings before one-off items to £275 million ($439.3 million), beating a £238 million estimate in a survey of analysts by Bloomberg News.

The company pledged to reinstate its dividend. “We’re certainly making decent progress,” chief executive officer Ian Meakins told journalists on a call yesterday.

“Market share of our core businesses has been gaining or holding,” he said.

Babcock International rose 3.4 per cent to 597.5p after the company said trading for the full year was “consistent” with its expectations. – (Bloomberg)