Fresnillo leads basic resource gains keeping Footsie above 6,000 mark

FTSE:6,016.98 (+7.06) Mid-250:11,766.58 (+57.84) Small Cap:3,260.44 (+10.56)

UK STOCKS advanced for a second day yesterday, extending the benchmark FTSE 100 Index’s biggest back to back weekly rally since September, amid specul-ation that the global economic recovery is strengthening.

The FTSE 100 rose 7.06, or 0.1 per cent, to 6,016.98 at the close in London. The measure rallied 1.9 per cent last week as better than forecast US jobs data boosted optimism in the global economic recovery.

The FTSE All-Share Index increased 0.2 per cent yesterday.

“Last week’s US data will have helped dispel some of the recent concerns on the strength of the underlying economy,” said Graham Bishop, a London-based European equity strategist at Royal Bank of Scotland.

“We continue to believe the economic cycle is supportive of equity markets, and see continued appeal in developed markets,” he said.

The FTSE 100 has climbed to within 1.5 per cent of this year’s highest level as concern eased that Japan’s strongest earthquake on record and revolts in the Middle East and north Africa will curb global economic growth.

The gauge has soared 71 per cent, or 87 per cent including reinvested dividends, since its March 2009 low as the global economy recovered from recession and corporate profits beat estimates.

Banks were the sharpest fallers, facing pressure from the prospect of higher interest rates which are likely to depress margins.

The ECB said it expected to raise interest rates on Thursday, with bets increasing that the Bank of England as well as the US Federal Reserve might follow suit.

Sentiment on banks was also dampened by worries over the debt situation in Ireland and Portugal, and the potential tightening of regulations surrounding their capital requirements.

Fresnillo jumped 2.9 per cent to 1,611p as the price of silver rallied.

Aggreko surged 5.3 per cent to 1,678p after saying it will supply Tokyo Electric Power with emergency power, after the Japanese utility’s Fukushima Dai-Ichi nuclear plant was damaged by the March 11th earthquake and tsunami.

Tesco gained 1.2 per cent to 393.8p as Credit Suisse advised buying shares of the UK’s supermarket chain before the company reports 2010 earnings on April 19th. – (Bloomberg/Reuters)