Miners help FTSE rise as macro woes stunt progress

Mon Jun 13, 2011 11:58am EDT

* FTSE up 0.1 percent

* ENRC boosted by hopes of Glencore approach

* Investors cautious on macro woes, inflation data eyed

By David Brett

LONDON, June 13 (Reuters) - Miners dug deep to help lift Britain's FTSE 100 share index marginally on Monday, as bid talk swirled around Kazakh miner ENRC.

ENRC ENRC.L rose 4.7 percent, outperforming a 0.2-percent rise on the British mining index, .FTNMX1770, after the Sunday Times said commodities trader Glencore (0805.HK) was considering a 12 billion-pound ($19 billion) takeover bid. [ID:nLDE75C0AM]

ENRC shares have been savaged recently, down almost 24 percent since mid-April to Friday's close, as a corporate governance crisis at the company has sapped investor confidence.

ENRC shareholder Kazakhmys (KAZ.L), also weaker in the previous session, added 2.2 percent.

Separately, Kazakhmys secured a $1.5 billion loan from China to help develop one of its copper fields, prompting Evolution Securities to repeat its "add" rating on the stock. [ID:nLDE75C01J]

The FTSE 100 .FTSE closed up 7.66 points, or 0.1 percent, at 5,773.46, in thin volumes, having dropped 1.6 percent on Friday and ending below the 5,800 level for the first time since late March.

"The index needs to post a weekly close back above (its 200-day moving average of around 5,835) to stabilise in the near term, while on the down side the index currently has trend line support at 5,750 from its 2009 lows at 3,460.70," Michael Hewson, market analyst at CMC Markets, said.

DOWNBEAT TONE

The underlying mood in the market remained cautious, with investors pressured by concerns over a sluggish global economic recovery after a run of downbeat U.S. economic data, with inflation data out of both the UK and U.S. on Tuesday.

Fears over a sovereign default in the euro zone also lingered.

The cost of insuring peripheral euro zone bonds against default hit record highs on Monday as disagreement over how to tackle Greece's debt crisis underpinned safe-haven debt.

Back among London's blue chips, Aggreko (AGGK.L) shed 3.2 percent as Numis Securities cut its rating on the temporary power supplier to "hold" as it sees increased competition in the sector following Horizon Acquisition's HZNA.L purchase of U.S.-based APR Energy.

Negative broker sentiment also weighed on Reckitt Benckiser (RB.L), off 1.3 percent, with Morgan Stanley cutting its rating on the consumer goods firm to "equal-weight", traders said.

And Imperial Tobacco (IMT.L) fell 1.4 percent after the cigarette group said price cutting in Spain meant its full-year adjusted operating profit from that country could be reduced by up to 110 million pounds. [ID:nLDE75812C]

Back on the upside, Vodafone (VOD.L) rose 0.8 percent as RBS raised its target price on the mobile telecoms firm and said it remained relatively attractive.

A trader said: "Vodafone has consistently exceeded its guidance for the last two years and we expect them to deliver ahead of expectations next time and this will result in yield buyers adding this to portfolios."

GlaxoSmithKline (GSK.L) climbed 0.5 percent after the U.S. Food and Drug Administration gave its limited backing for the drugmaker's and Valeant Pharmaceuticals International's (VRX.TO) new epilepsy drug Potiga. [ID:nLDE75C05U]

Banks .FTNMX8350 rose as Britain's Financial Service Authority extended the amount of time needed by the country's top banks to settle claims over the mis-selling of payment protection insurance (PPI), which rattled the banking sector last month. [ID:nWLA2353]

Lloyds Banking Group (LLOY.L) added 1.4 percent, after the Sunday Times reported it could cut up to 15,000 jobs as part of a new 1 billion pounds cost-saving plan. [ID:nLDE75B05G] (Additional reporting by Tricia Wright; Editing by David Cowell)

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