Footsie has 5300 mark in its sights as punters pour cash into shares

Mickey Clark
11 Nov 2009

City investors were continuing to pump money into the stock market today as leading shares led another assault on the 5300 resistance level.

At the same time, the price of gold continued to take advantage of a weak dollar, rallying from yesterday's sell-off to post a rise of $8 to a record $1,113.85. That, in turn, provided a lift to miners, such as Randgold, which topped the leaderboard with a leap of 223p to 4800p. It was accompanied by Rio Tinto, up 101p at 3143p, Kazakhmys, 53p to 1305p, and Anglo American, 53p to 2487p.

The heavy weighting of the miners lifted the FTSE 100 index 43.41 to 5273.96. Second-liners were also being squeezed higher, which was being reflected in the FTSE 250 index, up 70.19 at 9191.15.

Dealers said that with interest rates likely to remain low for the foreseeable future, investors had little choice where to invest their money. The stock market continued to offer the best returns.

The broking arm of RBS has wasted little time in giving results from J Sainsbury, up 8p at 335½p, the thumbs-up. It has repeated its buy rating on the shares after pointing out the numbers, showing pretax profits up 18% at £307 million, were ahead of the City's £301 million consensus and that the property revaluation had been positive. But the City gave the thumbs-down to the profits warning from publisher Reed Elsevier, down 19½p at 465p, making it the biggest blue-chip casualty.

Morgan Stanley has raised its rating on Standard Life, up 7½p at 223½p, from underweight to equalweight and jacked up its target from 211p to 260p. The broker continues to have an underweight rating on Prudential, 10p better at 603½p, but has moved its target from 553p to 645p.

African Diamonds stood out with a rise of 3½p to 50p after reporting a rapid start to its Botswana mine. De Beer's stake in the AK6 Botswana diamond mine project has been acquired by Lucara. Development of the mine will start next year with production coming on stream by 2011. African Diamonds has an option to increase its stake in the AK6 from 29% to 40%.

AIM-listed exploration and production miner African Aura Mining, which has gold and iron ore interests in sub-Saharan Africa, plans to undertake a 4000-metre diamond drill programme at its Weaju gold project in western Liberia to further expand and define the resource on the company's Bea Mountain mining licence. The Weaju deposit is a high-grade gold deposits north east of African Aura's New Liberty deposit in western Liberia. The shares rose 2½p to 71p.

In New York, Wall Street's winning streak showed signs of coming to an end after some corporate numbers didn't live up to expectations and the Dow Jones saw its lead pared back to just 20.03 by the close at 10,246.97.

Engineering giant Fluor said it fell foul of its target because of lower spending on energy projects and shares fell 7% to $44.63. United Rentals also fell almost 10% to $8.89 after a downgrade by credit-rating agency Moody's.

Tokyo shares marked time as investors endured a lacklustre session. The latest rise in the yen offset a surprisingly large jump in domestic machinery orders for September and a forecast for a rise in the fourth quarter. The Nikkei 225 closed less than a point higher, up 0.95 at 9871.68.

Technology shares such as Advantest slipped after rising the day before and non-ferrous metals makers such as Dowa Holdings came under pressure amid concerns over long-term demand. But Japan Airlines rose 4.8% after sources said the state-owned Development Bank of Japan will offer a 100 billion (£665 million) line of credit to JAL to keep the airline from running out of cash.

Hong Kong were higher with index heavyweight HSBC leading gains. The Hang Seng index rose 359.05 points to 22,627.21.