By Michael Taylor
LONDON, March 12 (Reuters) - The FTSE 100 index <> of
Britain's top shares ended up sharply on Wednesday, powered by
mining stocks that were led higher by takeover target Kazakhmys
<KAZ.L> which jumped 20 percent.
The blue-chip index closed 86 points or 1.5 percent higher
at 5,776.4, shrugging off British Finance Minister Alistair
Darling's first budget.
The pan-European FTSEurofirst 300 index <> also rose,
adding to gains on Tuesday when major central banks injected
cash into strained credit markets.
Kazakhmys ended 16 percent up after touching a record high
when Kazakh mining group Eurasian Natural Resources <ENRC.L>
(ENRC) said it was considering buying its rival. []
ENRC, which is due to enter the FTSE 100 on March 26 in a
quarterly rejig, said it had held discussions with Kazakhmys as
it explored possible strategic opportunities following its
London flotation in December. ENRC slipped 3.2 percent.
Within the sector, BHP Billiton <BLT.L>, Rio Tinto <RIO.L>,
Anglo American <AAL.L>, Xstrata <XTA.L>, Lonmin <LMI.L> and
Vedanta Resources <VED.L> gained between 2.2 and 5 percent.
Elsewhere the government's latest budget saw growth
forecasts cut and borrowings ramped up as the British economy
faces its toughest period for the past decade. []
"It's pretty boring," said Peter Dixon, UK economist at
Commerzbank. "There is nothing in there to get us very excited.
The growth forecast has been downgraded -- we knew that. Public
borrowing forecast has been downgraded -- we knew that."
"Generally, the markets do not react the same way as they
did. The markets are more globally focused now than they once
were."
In midcaps however, bingo and casino firm Rank <RNK.L>
reversed earlier gains to dip 5.7 percent after Darling shunned
bingo industry pleas to scrap VAT on bingo cards and raised
gambling machine costs.
On the upside, Standard Life <SL.L> jumped 12.9 percent to
top the gainers' list on the FTSE 100 after it posted a
forecast-beating rise in 2007 operating profit, despite a 249
million pound charge as UK customers continued to cash in
policies early. []
Peers Old Mutual <OML.L> and Legal & General <LGEN.L> were
up 4.5 and 3.4 percent, respectively.
Beaten-down banks were buoyed by the move by the U.S.
Federal Reserve and other central banks. Barclays <BARC.L>
advanced 5.4 percent, Royal Bank of Scotland <RBS.L> rose 4.1
percent, Lloyds TSB <LLOY.L> climbed 2.5 percent and Standard
Chartered <STAN.L> gained 1.9 percent.
But HBOS <HBOS.L> lost 2 percent after going ex-dividend.
"All of these things are relatively short-term solutions,"
said Paul Kavanagh, a partner at stockbroker Killik & Co said on
Tuesday's surprise announcement from the Fed.
"The Fed is utilising those electric shock treatments to try
and revive life back into the patient, so it has to do it as a
surprise -- catch everyone out and try and provoke reaction."
"(But) I don't think anyone's really got a measure of the
scale of the (credit liquidity) problems. It can go a long way
from here -- all sorts of things being drawn into the system."
Also in the red, credit information firm Experian <EXPN.L>
shed 3 percent as traders pointed to a Credit Suisse note which
reiterated its "underperform" rating with a price target of 320
pence.
Services group Rentokil Initial <RTO.L> and directories firm
Yell Group <YELL.L> both lost ground ahead of an expected
announcement later today from index provider FTSE on its
quarterly review.
Oil shares were in demand however, with BP <BP.L> gaining
1.3 percent and rival Royal Dutch Shell <RDSa.L> 1.2 percent
higher.
The UK benchmark index is still down over 10 percent for the
year, with investors rattled by fears of the credit crisis
pushing the United States into recession.
(Additional reporting by Dominic Lau and Rebekah Curtis)
(Reporting by Michael Taylor; Editing by Richard Hubbard)
