London - Britain's top share index pushed higher in early deals on Tuesday, nudging back above the 6,300 level which was breached for the first time since May 19 2008 in the previous session.
At 11:09 SA time, the FTSE 100 index was up 12.19 points, or 0.2 percent, at 6,306.60.
The UK blue chip index gained 0.2 percent on Monday, but eased back from highs at the close having reached a 4-3/4 year peak at 6,311.26.
“It's nose-bleed territory but we seem to be acclimatising to the 6,300 level so far. Still all very tentative, though we are certainly approaching the end of January with a marked difference in sentiment compared to the end of December,” Andrew Crook of Sucden Financial Private Clients said.
Strength in energy stocks was again the main support for the FTSE 100 index, providing almost 7 index points, with the sector in demand ahead of its fourth-quarter earnings season, which Royal Dutch Shell kicks off on Thursday.
A rally by mining stocks, up 0.6 percent, also helped, with that sector tracking gains in copper prices on demand hopes after some positive US data on Monday.
Anglo American stood out, up 2.2 percent as the miner said it will take a $4 billion writedown on its Minas-Rio iron ore project in Brazil after delays and cost overruns forced it to increase expenditure on the project.
“Overall the update is better than expected (the first time we have used that phrase since the asset was acquired in 2007) We believe there are some in the market who would like to have seen AAL (Anglo American) walk away or at least bring in a partner. But overall we see the news as a relative positive,” Barclays Capital said in a note.
Drug stocks also lent their strength to the blue chips, led by gains in GlaxoSmithKline (GSK), up 0.7 percent, with traders citing the impact of an upgrade by Barclays Capital to “overweight” from “equal-weight” in a European sector review.
“We believe that GSK is approaching the end of an earnings downgrade cycle heading into the FY 2012 results and with significant potential for pipeline de-risking and optionality in 2013, we upgrade,” Barcap said in a note.
Market heavyweight Vodafone alone provided nearly 3 points of the FTSE 100's gain, as the mobile telecoms group extended a rally into a fourth session with a 0.8 percent rise. Investors continued to bet on talk it may sell its stake in its US wireless joint venture to partner Verizon.
But fixed line telecoms firm BT Group was a top blue chip faller, down 2.9 percent, with traders citing the impact of a BofA Merrill Lynch downgrade to “neutral” from “buy”.
Royal Bank of Scotland was the top blue chip faller, off 3.2 percent. Investors balked at reports that the state-controlled lender is preparing to pay as much as 250 million pounds in bonuses to staff at an investment banking division heavily implicated in the Libor-rigging scandal, according to the Financial Times.
RBS, which with the sector has logged good gains recently, was downgraded by Goldman Sachs to “sell” on Monday.
Peers Lloyds Banking Group and Barclays also fell back, losing 1.4 percent and 1.2 percent respectively.
Technical analysis was still positive for the FTSE 100.
“The UK index is overbought (its 14-day RSI is now above 80 percent) but that in itself does not represent a sell signal in a strong bull phase and it now looks pretty likely that we will see a test of the May 2008 peak, at 6,376, before this move reaches any kind of conclusion,” Charles Stanley technical analysts, Bill MacNamara said in a note. - Reuters