London - Britain's top share index climbed in morning trading on Friday, with commodities stocks bouncing back on a recovery in copper and crude oil prices.
The UK mining index and the oil and gas index rose 2.2 percent and 1.9 percent respectively, helped by a 1.7 to 3.5 percent rise in shares of Rio Tinto , BHP Billiton, BP, Tullow Oil and Anglo American.
Glencore rose 5 percent, after hitting a new record low on Thursday, in line with a bounce in the commodities sector. The share has slumped abut 60 percent in the past three months alone due to a sharp drop in commodity prices amid concerns for economic growth in China.
However, oil prices rose on Friday as strong seasonal demand from China outweighed weak consumer data from Japan. Copper prices also advanced after sharp declines in the past sessions.
“Given that the commodity stocks have been hammered so hard in the last couple of weeks, traders are very quick to latch on to any positive news. Copper and oil prices have made relatively small gains today, but mining and energy stocks have responded quite strongly,” IG analyst David Madden said.
“It suggests that we are possibly seeing some short-covering and bargain-hunting. But these companies are in a long-term downward trend and we have no reason to believe that the trend is coming to an end any time soon.”
Shares in mid-cap Synergy Health surged 44 percent after the company said the US District Court for the Northern District of Ohio had ruled against the Federal Trade Commission's request for a preliminary injunction to block Steris's acquisition of the firm.
The blue-chip FTSE 100 index was up 2 percent at 6,082.28 points by 08h05 GMT after falling 1.2 percent in the previous session. The benchmark index is still down more than 7 percent so far this year.
“Despite things looking much more positive this morning compared to just 24 hours ago, it still needs to be seen if the positive momentum can be sustained or, as the day progresses, the bears will once again gain the upper hand,” Markus Huber, senior analyst at Peregrine & Black, said in a note.
“Should yesterday's lows hold and stocks continue to move higher from here, together with the lows seen in August this would most certainly constitute a major bottom, possibly resulting in a massive short-squeeze in the days ahead.”
REUTERS