Miners drive FTSE recovery

In mid-morning trading the FTSE 100 is up 14 points at 6501 as commodity stocks lead the comeback. 

Miners working
Source: Bloomberg

In London, equity traders shunned the selloff in Asia and adopted a more optimistic attitude. Banks are back in favour with dealers now that the five major UK banks have reported, and since the dust has settled the British banking sector is broadly unchanged after this round of the reporting season.

Despite iron ore falling to its lowest level in nearly five years, the London-listed miners are trading higher this morning as dealers dig up whatever bargains they can find.

Last orders have been called at the Spirit Pub company, as Greene King has agreed to purchase the firm. Greene King has an appetite for pubs that serve food and at £774 million, the offer fits the bill.

Weir Group is  feeling the effects of cooling in the commodities business. The Scottish engineering company is set to close five plants as cost-cutting is needed to hit its full-year expectations. Shares in

Associated British Foods are marginally lower this morning as the slump in sugar prices put a sour taste in traders’ mouths.

Low cost retailer Primark had ‘another magnificent year’; even though the credit crisis is over consumers haven’t changed their shopping habits.

Virgin Money is planning to float on the stock market this month. The Branson business bought Northern Rock when it was at rock bottom, and IG is offering a grey market on what the market capitalisation will be. Currently it suggests a  market value of £1.9 billion.

In the US, we are expecting the Dow Jones to open five points higher at 17,371. AIG shares are up 1.25% in the pre-market after the insurer announced EPS that exceeded estimates after last night’s close.

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