Gains in Rio Tinto, BHP Billiton stocks drive Footsie above 6,000 mark

FTSE: 6,000.07 (+42.25) Mid-250: 11,588.53 (–19.94) Small Cap: 3,272.46 (+0.62):LONDON EQUITY markets continued their February rally yesterday, as the relentless commodity boom drove resource stocks, helping the FTSE 100 reclaim the 6,000 mark.

By the close, the index was off its best level of the session, but remained 42 points higher at 6,000.07, a gain of 0.7 per cent.

The FTSE had been as high as 6,020 earlier in the session.

Australia-based duo Rio Tinto and BHP Billiton were up 3.8 per cent to £45.08 and 3.4 per cent to £25.14 respectively.

Johnson Matthey, the platinum producer, reported strong demand in the period since October 1st and said higher precious metal prices resulted in underlying operating profit being up 31 per cent on the same period a year ago. Its shares, after an early gain, fell to profit-taking, down 0.9 per cent to £19.83.

Imperial Tobacco rose 5.9 per cent to £19.00 after it said that to reflect its strong financial position it would increase its dividend pay-out ratio to 50 per cent of 2011 adjusted earnings. Imperial said full-year volumes would be up 1.2 per cent, driven by its international brands and growth in emerging markets.

This also helped rival British American Tobacco rise 1.4 per cent higher to £23.53.

Icap, the interdealer broker, said that in the quarter that ended in December its core revenue was up 9 per cent over last year. The company added that its profits for the full year, which ends on March 31st, were in line with previous forecasts of between £333 million and £357 million. Its shares eased 0.6 per cent to 545p

Pub and restaurant groups lost ground after HSBC said it was “calling time” on the sector.

“After two years of outperformance, pub and restaurant sector earnings are at greater risk from rising input costs and a bleaker consumer outlook,” the broker said.

HSBC said its preference in the sector was for managed models over tenanted models and raised its rating on JD Wetherspoon. However, Enterprise Inns and Greene King were both lowered to “neutral” from “overweight”, while Marston’s was cut to “underweight” from “neutral”.

Shares in Wetherspoon were up 1 per cent to 459p, and Enterprise managed a gain of 0.7 per cent to 107p, but Greene King lost 0.9 per cent to 475.8p. – (Copyright The Financial Times Limited 2011)