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Anyone looking for reassurance the bear market is over, and share prices will never fall again, need look no further than the mining sector for inspiration.
Barclays Capital has decided to jack up its target price for Rio Tinto, 151p ahead at 3111p, from 2900p to 3700p based on the mining giant's “attractive equity valuation”.
It reckons Rio is well placed to take advantage of any upturn in demand from China. Only last year, rival BHP Billiton, up 25p at 1550p, failed to agree terms with Rio of an offer worth 6000p a share. If only investors could trade retrospectively.
BarCap also appears to have warmed to Kazakhmys, which it has raised from underweight to equalweight, lifting its target from 250p to 750p. But it may already be behind the curve with the price up 64p at 727½p.
Ferrexpo slipped 1¼p to 171½p after Cazenove urged clients to take profits. The shares have risen almost fourfold this year despite earnings momentum moving in the opposite direction.
They have been supported to some extent by stakebuilding by Privatbank owner Kolomoisky, which holds 10%, leaving just 14% in free float. RPG Industries remains a holder of 25% and may see Kostyantyn Zhevago (51%) as a strategic partner to help give it access to the Ukrainian coal industry.
At the other end of the scale, shares of Vatukoula Gold Mines retreated 0.2p to 1.025p following the breakdown in bid talks.
The company said last month that it had received a number of approaches, all of which have now been withdrawn. While the talks were ongoing, Vatukoula was able to raise £3.8 million by way of a placing of 634 million new shares at 0.6p.
The FTSE 100 index briefly climbed back above 4500 before paring back its lead to 53.99 at 4450.48, its highest since 8 January. It is now up 16.2 on the year despite the Bank of England's assertion that global banks and the financial system remain fragile.
The big question is whether this is the start of the long-awaited recovery or just an old-fashioned bear squeeze. Some investors are clearly happy to go with the flow.
New York shares lost an early lead this afternoon, the Dow falling 27 points to 8485.28. In London, Barclays retreated 5¾p to 282¼p after briefly touching 307p, having posted a 15% rise in profits. The forecast of losses this year from Lloyds Banking Group left its shares nursing a fall of 12.8p at 100.4p.
Royal Bank of Scotland drifted 0.8p to 44.9p after UBS downgraded the lender from neutral to sell ahead of tomorrow's first-quarter trading update. Almost 300 million shares changed hands.
JPMorgan has raised its sights on clothing chain Next, down 60p at 1580p, from 1150p to 1400p after yesterday's trading update. Japanese broker Nomura has raised its rating on M&S, down 7p at 344p, from neutral to buy.
Nighthawk Energy ran into profit-taking, shading ¼p to 44¼p after doubling since March. Nighthawk last month announced the sale of its Jolly Ranch project.
The buyer's identity and the price paid are still to be disclosed.
