By Michael Taylor
LONDON, Jan 25 (Reuters) - The FTSE 100 <> index of
Britain's leading shares climbed toward the 6,000 mark on
Friday, buoyed by commodities prices and hopes that a U.S.
government stimulus plan may allay recession fears.
At 1118 GMT the blue-chip index was 67.6 points higher at
5,943.4, adding to a 4.8 percent jump on Thursday, its biggest
ever points gain, after a grim start to the week. The FTSE has
risen 0.7 percent this week.
President George W. Bush and congressional leaders agreed on
Thursday on a $150 billion package of tax rebates and business
incentives meant to ward off a recession in the world's largest
economy. See []
Miners accounted for 15 points of the index rise, after a
power shortage forced three of South Africa's top gold producers
to suspend production at all their mines, pushing up commodity
prices. []
Rio Tinto <RIO.L> added 3.9 percent, Kazakhmys <KAZ.L>
gained 7.1 percent, and Vedanta Resources <VED.L> tacked on 5.9
percent.
Rio's chief executive said on Friday that the miner has not
engaged with potential Chinese partners to help defend against
rival miner BHP Billiton's all-share takeover bid, which he said
was still "two ballparks away" from fair value. See
[]
But Lonmin <LMI.L> lost 2.6 percent after Lehman Brothers
cuts its earnings estimates on the company.
"After a week of extreme volatility in global markets, which
has seen the FTSE 100 index post both a daily gain and loss of
(about) 5 percent, some sense of normality seems to have
returned to the markets this morning," said Victoria Savage, a
trader at CMC Markets.
"A higher close on Wall Street followed by a rally in Asian
markets overnight came after news of a stimulus package for the
U.S. economy boosted sentiment."
Oil and gas stocks pushed up the index as U.S. crude <CLc1>
oil prices rose after the U.S. government plan boosted
confidence in the health of the U.S. economy.
Oil giant BP <BP.L> added 2.3 percent, and rival Royal Dutch
Shell <RDSa.L> was 1.9 percent higher.
Banks also rebounded, even though the talk of the trading
floors remains the 4.9 billion euros fraud at France's Societe
Generale <SOGN.PA> revealed on Thursday.
Barclays <BARC.L> added 1.9 percent, and Royal Bank of
Scotland <RBS.L> was up 1.5 percent.
Further on the upside, Imperial Tobacco <IMT.L> climbed 4.5
percent after it offered 910 million euros ($1.33 billion) for
the 40 percent of Spanish logistics company Logista <LOTA.MC>
not owned by Altadis, but said it might back off if a higher bid
emerged.
Imperial also said it proposed a rights issue linked to its
takeover of Franco-Spanish cigarette maker Altadis <ALT.MC>
<ALDS.PA>, a deal that went unconditional earlier this week, to
raise a maximum 5 billion pounds ($9.8 billion).
S&N TAKEOVER GIVES CHEER
In other M&A news, Carlsberg <CARLb.CO> and Heineken
<HEIN.AS> finally agreed a cash bid of 7.8 billion pounds to buy
and break up Scottish and Newcastle (S&N) <SCTN.L> to boost the
Danish brewer's position in Russia and the Dutch group's
presence in western Europe. For more see [].
S&N tacked on 2.3 percent.
Also supporting the index, heavyweight Vodafone <VOD.L>
gained 4.5 percent after UBS increased its price target to 216
pence from 212 pence with a "buy" rating.
On the downside, Aviva <AV.L> fell 2.3 percent after UBS cut
its price target but kept its "buy" rating.
Property and housebuilders also fell, with Persimmon <PSN.L>
and Taylor Wimpey <TW.L> both down, as traders cited profit
taking.
"(The market) was due a bounce, so that doesn't surprise me,
but I'm wary of saying that the turn has been achieved," said
Jeremy Batstone-Carr, head of research at Charles Stanley.
"We may have to retest those lows before we can feel more
confident about a bottom having been reached."
(Editing by Will Waterman)
