Leading shares closed higher, with strength in oil and mining stocks offsetting the weak start on Wall Street

Leading shares closed higher, with strength in oil and mining stocks offsetting the weak start on Wall Street, dealers said.

The FTSE 100 index closed up 62.7 points at 5,681.5, with the broader indices all higher.

Volume was average, with 2.436 billion shares changing hands in 295,436 deals.

On Wall Street, US stocks edged lower with a disappointing December sales update from Wal-Mart and a price target cut on General Motors Corp weighing on the Dow Jones Industrial Average.

At London’s close, the DJIA was 6.2 points lower at 10,711.3, while the Nasdaq fell 5.46 points to 2,199.86.

Back in London, miners were in demand as copper and gold prices continued to trade higher. Xstrata rose 60 to 1,422, with BHP Billiton up 14 at 963-1/2, Kazakhmys gaining 35-1/2 at 809, Antofagasta 42 higher at 1,911, Rio Tinto rising 48 to 2,703, and Anglo American 61 up at 2,040.

Oil prices remained higher, with crude prices holding above 63 usd a barrel as concerns over Russia’s gas row with Ukraine continued, despite assurances from Russia that it is in the process of restoring normal supplies to European nations.

BG Group continued to lead the FTSE 100 risers at midday, up 20 pence at 594-1/2, while Cairn Energy gained 37 pence at 1,957, Royal Dutch Shell added 59 pence at 1,917 and BP moved up 18 pence to 637.

Compass Group meanwhile, rose 6 to 226-1/2 on news Richard Cousins, the former head of BPB, may have been approached to become the new chief executive of the embattled catering group, according to a report in today’s Independent.

Retailers were under pressure amid concerns over trading during the festive period.

Footfall, the retail information provider, said the amount of people traipsing the high street between Dec 26 and 30 — normally the height of the post-Christmas sales season — fell by 12.4 pct compared with the equivalent period last year.

Marks & Spencer dropped 8 pence to 497, while Tesco eased 6-1/4 pence to 325-1/4, while on the second line Woolworths fell 1-1/2 pence to 37-1/4 and Body Shop dropped 3 pence to 260.

Electra Investment Trust led the mid-cap risers yesterday, up 72-1/2 at 1,192-1/2, after agreeing to sell Inchcape Shipping Services, an independently managed network of ship agents, for 285 mln usd to Istithmar, a major investment house based in the United Arab Emirates.

Meanwhile, Rank Group dropped 8-3/4 to 297 on profit-taking following gains after the 430 mln stg sale of its Deluxe film processing division last week.

UBS today reiterated its ‘neutral’ stance on the stock and lifted its price target to 297 pence from 288 previously.

William Hill was among the midcap risers, up 22-1/2 pence to 558 after the bookmaker said profits for last year were likely to be above expectations as it looked forward to a strong 2006 boosted by the football World Cup.

Cookson Group jumped 14 pence to 439 after Numis Securities raised its target to 514 pence from 465, while reiterating its ‘buy’ rating, following the firm’s recent disposal of its SCS unit.

In other news, Soco International surged 29 to 815 after finding oil in the first exploration well it spudded on the East Shabwa field in Yemen.

The hole, known as Jathma-1, flowed over 1,900 barrels of oil per day, Soco said in a bullish drilling update.

Panmure however, downgraded the shares to ‘hold’ from ‘buy’ on valuation.

Among small caps, Pan Andean shares dropped 1-1/4 pence to 9-3/4 after announcing that it has plugged its well in Texas as a reservoir encountered also contained water.

On the economic front, the UK’s manufacturing sector continued to expand at a modest pace during December, but not nearly at the same rate as the 12-nation single currency zone, a closely-watched survey found today.

The purchasing manager index of activity in the monthly Chartered Institute of Purchasing and Supply survey rose to 51.1 in December from 51.0 in November. Analysts polled by AFX News had anticipated a modest decline to 50.8.

A reading above 50 indicates an expansion in activity, while a sub-50 figure indicates contraction.

Source : www.forbes.com