Metal prices are digging a hole mining

Both are images of the past, ghosts industry of the now defunct far from the life of the 21st century - this is why the emergence of 33 Chilean exhilarating a hole in the ground came as a little surprise to the public this week.

As it turns out that mining do more after all, but a global industry employing trillion of 43 million people.

Modern technology may have done away with the need to pick axes and asses, but there are places that still rely on men crawling through tunnels in search of more and more scarce commodities.

For these men, it is apparently worth braving the extremely poor security conditions in exchange for a 20pc than copper average salary miner in the South American nation.

Men rescued in San José, worked in a copper mine - and the Chile is the world number one producer of base metal which saw higher prices for the months.

Euphoria at the Chile is likely to die before long, when the miners returned to their wives and maîtresses.Mais there is still much to be happy about for mining giants.

Department of mines Chile closed mines around 300 since the accident, concerned about the risk of disasters plus.Cependant, this is unlikely to have a major impact on the output of the country.

Product Chile one-third of the world copper around 95pc this is operated by the Corporation, Codelco and BHP Billiton - are under threat of all major international stops in their operations.

Meanwhile, prices are currently at a maximum of 27 months $ 8,490 per tonne and 5MC just below the record copper reached in 2008.

Whereas the weakness of the dollar has provided a boost short-term all precious metals and base, some have increased more rapidly than others - and that includes copper.

Two largest copper producers worldwide, Codelco and Freeport-McMoRan copper and gold, warned this week supply "very tight" next year.

The reasons for this are deteriorating mining, metal of inferior quality and lack of investment in their factory.

It is not only production is declining, but demand is rising.Even today, there are in China and the London Metal Exchange low inventory levels.

Most copper goes into the construction and electrical equipment.

But demand for copper in the future of conduct will be consumers want to buy more environmentally friendly hybrid cars that use twice the amount of copper because they have an electric motor as a motor.

In addition to this, a recent report by the International Copper study demand for red metal Groupsays increase by 3 81pc this year and 4 49pc next year, but Rio Tinto mining giant believes current projects can only supports 3pc growth rates.

It has really been driving the massive rise in base metals copper and providing a boost to the mining industry as a whole.

"FTSE index mining has outperformed FTSE100 stock by 15pc 35pc increase since June, index," said Nick "Metals" Moore, an analyst at RBS products.Antofagasta led the charge with a gain of 71pc, with the company offering price copper exposure, volume growth and position solid balance sheet.

"Other copper producers also increased further to 50pc investors leverage a premium to other miners at the back of the strong fundamental underlying and extremely optimistic market copper pure-play business copper consensus".

Goldman Sachs has higher than forecast in city analysts arguing that commercial copper 35pc higher than $11 per tonne in 12 mois.Il advised customers purchase contract from December 2011 as demand will probably lead to shortages of metal next year.

And there lies the reason as industrial accidents such as test Chilean minors or the latest tragedy in China, where 11 men were trapped dead fear and 26 other people were killed in an explosion of gas, will be on offshore companies or their employees to dig deeper into the Earth for the copper - and other natural resources.

Mining can still be dirty, dangerous, technically difficult and full of risk politique.Mais if prices increase in mineral products industry, is one of the growth sectors more profitable and more critical of the planet.

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QE2 concerns weigh on FTSE 100 shares

Kazakhmys, Vedanta Resources and Xstrata fell 70% £ 13.21, 103 p £ 20.66 and 50½p to £ 12.64 respectively.

Fall miners came despite a note of the overall strategy of equity Credit Switzerland which mining "overweight" to "reference".

Analysts said they expected a second set of easing quantitative to assist commodity and said China was "passing.""We expect growth of 9-10pc next year, with growth of 8.8pc.Malgré investment acceleration of the growth in wages, inflation near term seems maîtrisable.Cuivre import and steel demand could accelerate the growth of recent lows", added the broker.

Weakening of minors has helped drag FTSE 100 lower points 61.28 5646.02 - end the lowest since October 5 - a day when GlaxoSmithKline and Whitbread ex-dividende knock 3.31 points off the coast of the index.

Join the laggards was Kingfisher, owner of B & Q, slipped 237.1(5)(a) p 8.4.

Wednesday, clarify Chief Executive what ian Cheshire said in an interview at the World Congress announcement last week on expenditure cuts retail customers, but adds "the first six months of next year will be very difficult".Cependant, he said that there in the second half of the year and in 2012, "reasons to be optimistic".

Banks have been posted better than Deutsche Bank day results topped with expecations.Lloyd's Banking Group reached 1.13 69.12 and Barclays 4.95 to 282.3 p.

What united utilities earned 1 599½p and Scottish & Southern Energy reaching 1 £ 11.09 DEFENSIVE have also swallowed, with Severn Trent bubbling up to 5 p to £ 13.64.

Among the plugs Talvivaara checked to 13½ at 546 p as Finnish nickel producer said that he had discovered 54pc metal more in its deposits.

Seymour Pierce kept analysts "buy" rating and put their price target 532½p ongoing review, saying the news was "mixed".

While there was some positive news on the side of the mining operation, the broker said that in the short term, the transformation of the company's side was still experiencing difficulties.

Riding place ranking was too Halfords, won 16.2 percent 425.8 after Goldman Sachs raised the seller of auto parts for bikes "buy" to "neutral" after a period of underachievement.

"Actions are 33pc 22pc to the sector on a basis of 3 months and 6 months," said the broker.

Analysts said that the retailer has a high stable top leadership of the market in many categories of product line in its portfolio and they expect national store and the Autocentres redésignés expansion to ensure growth in the medium term.

At the other end of the scale on a day where the FTSE 250 throw 10827.28 113.44 points was Tate & Lyle, sliding 23.1 percent 499.9 after evolution securities said sugar business assessment was now "sweet enough" and cut their "neutral" from "buy" rating.

"In the short term there are several key issues, in execution of a very strong in the price of the shares, we think leaving the stock search events," said analysts.

The largest Faller mid-cap Wednesday, was however, Soco International, who slipped 34.8 to 292 p after petroleum connected Explorer and ababndoned exploration second place in the Democratic Republic of the Congo after he was found of hydrocarbons on the site.

However, increased Credit Switzerland "neutral" to "underperform" as Explorer analysts they anticiapted potential positive catalysts for the price of the shares.

Elsewhere in the oil sector, the smell of black gold is stimulating excitement - and the share of the dramatic price increases.Desire petroleum shot 50.75 - or 76 03pc - 117½p as internet bulletin boards were alive that the browser could have struck oil speculation.

But others were less certain sources saying that they knew the existence of a reason behind partage.La company prices skyrocketing refused to comment on the rise.

Rockhopper Exploration acquired 18.25% 318.25 Panmure Gordon launched on Explorer focused on the Falkland Islands with a "buy" rating. ""We believe that drilling program to appear can demonstrate the potential value of the region," said analysts.

Among the small caps, Helphire tumbling 8.5 - or 28 33pc - of 21½p after Manager claim accident stated that the lower accident rate meant that results for this year would fall below expectations.

Shares of CSR, manufacturer of smart phones, cars and digital cameras, tumbling Wednesday after the company provides a plunge in the fourth quarter income Wednesday.

CSR throw 35.7 309.6 p despite having seen a 6pc increase the third quarter revenue at $222.1 m (£ 140 7 m) as a manufacturer of said chip revenues during the next quarter would reflect "" trends economic macro, low-level exposure to Smartphones and constraints of capacity in some of our lines of products GPS.""

Joep van Beurden, CEO, CSR, said results of the quarter, these are "robust" and the company was confident in his ability to "lead the growth of earnings.

Securities analysts Numis retained their "buy" rating, the results were well ahead of time on the pay-by-hand due to improved gross margins and a lower tax burden.

But analysts Seymour Pierce moved to "hold" to "buy", say was the combined company "clearly struggling with a weak position in the smartphone market important all."

After the closed market, CSR restarted its program redemption of shares, buying common shares back 102,000.

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FTSE marks time as Asian shares hit two-year highs

Asian stocks shot to a two-year high, boosted by interest in emerging markets, as the dollar remained close to an eight-month low against a basket of major currencies, with expectations increasing that the Federal Reserve will add to money supply before the year is over to support the US economy.

The MSCI index of Asian stocks outside Japan rose to the highest level since June 2008, as investor confidence in the region's prospects was boosted by signs Chinese manufacturing activity has held up well.

"Continued foreign buying, amid the US dollar's recent weakness and an increasing preference for emerging market stocks, has lifted the market to a new high," Lee Jin-woo, a market analyst at Mirae Asset Securities in Seoul, told Reuters.

Strong foreign portfolio flows into the region have lifted Asian currencies, putting pressure on regional central banks to step up intervention to limit the inflow of speculative "hot money" and to support their export-oriented economies.

In South Korea, foreign investors were buyers of a net 141 billion won ($124.8 million) worth of stocks, poised to pick up shares for a 14th straight session, the longest buying streak since April.

The MSCI index of Asia Pacific shares outside Japan, which has risen for six consecutive weeks, was up 1.1pc with a 2.3pc gain in the energy sector leading the pack on the back of firm crude prices.

Hong Kong's Hang Seng index led regional exchanges, rising 1.4pc to 22662.15 points.

However, the Nikkei closed 0.25pc down at 9381.06, as trading in Japan remained nervous ahead of a Bank of Japan policy decision on Tuesday.

Former BOJ Deputy Governor Toshiro Muto said on Friday the central bank may ease policy as inaction would run the risk of spurring further yen gains, given the prospects for easing by the Fed.

Traders are not expecting the BOJ to make a substantial change to policy but may hold off on big bets on the yen ahead of central bank meetings in Britain and the eurozone on Thursday, as well as the September US payrolls report on Friday.

"Nervous trade will likely continue this week, even after tomorrow's event, as US jobs data is also set to be released later in the week," Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities, told Reuters.

In Europe, the French CAC and Germany's DAX were each 0.5pc lower in early trading.

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Wolseley climbs on Credit Suisse note but miners drag down FTSE 100

"We believe the US non-residential market will trough in 2011 and start to deliver positive growth from the second half."

Wolseley, the plumbing supplies group, ended up 19p at £16.01.

National Grid took the top spot after adding 12½ to 553½p as the City warmly welcomed the appointment of Andrew Bonfield, Cadbury's numbers man, as its new finance director.

Mr Bonfield, who replaces Steve Lucas who is retiring at the end of the year, is said to have a played a key role in forcing Kraft to increase its takeover offer for the Crunchie and Wispa maker.

Analysts at RBS said Mr Bonfield has both US experience from his time as chief financial officer at pharmaceutical group Bristol-Myer Squib and energy nouse from his days as finance director of BG Group.

National Grid was also boosted by news that Ofgem, the energy regulator, reckons £32bn needs to be spent on the UK's energy infrastructure over the next 10 years.

A new finance director also helped boost Yell, up 1 to 15.5p. The struggling FTSE 250 directories group's shares put on more than 10pc at one point following the appointment of Tony Bates, a former Colt Telecom executive, to the finance role.

BT took second spot in the bluechip index, up 3 to 145.8p, as traders absorbed positive news flow from last week.

Standard Chartered put on a late surge adding 3 to 145.8p after it announced plans to aggressively expand its small and medium-sized business operations.

The Asian-focused bank plans to hire 1,200 people to help small business over the next three years. "Almost everything we are trying to do, we want to double" said Standard Chartered's head of global consumer banking Steve Bertamini.

African Barrick Gold benefited from the continued belief that gold prices will continue their upward trajectory as calls grow for a fresh round of quantitative easing. The gold miner ended the day up 5½ to 605p after JP Morgan raised its target price to 900p from 755p.

However, the rest of the miners languished at the foot of the table and helped drag the FTSE 100 index down 36.93 points to 5555.97. Kazakhmys dropped 38p to £14.23 and Xstrata fell 32½p to £12.09. Xstrata was also hit by speculation that Singapore's Sin-Tang Developments maybe planning a bid to rival Xstrata's $416m offer for Australia's Sphere Minerals.

Inmarsat end the day down 13½ at 655p after its largest shareholder Harbinger Capital Partners confirmed that it is considering a possible stake sale.

The Daily Telegraph reported on Saturday that the US hedge fund manager was considering disposing of some of its 28.1pc stake in the telecoms group.

After the market closed Harbinger announced that it would sell 13pc of its stake. Credit Suisse and UBS have been appointed to run the sale.

The 60m share sale will weigh heavily on the shares because many believed that Philip Falcone, who manages the hedge fund, had been plotting a takeover.

Mr Falcone said: "Inmarsat has been a terrific investment for Harbinger and its investors. Although we have determined that we are not going to make an offer for all of the company, I remain a strong believer in Inmarsat's future and am extremely happy to maintain a core position in the company's stock and our partnership with Inmarsat through LightSquared."

In addition, LightSquared, a US broadband and satellite network provider, said it would accelerate the implementation of its spectrum co-operation plan with Inmarsat.

BP dropped 10.4 to 430.1p after the oil major announced it is to borrow €2bn (£1.7bn) to help it prop up a $20bn fund to compensate the victims of its Gulf of Mexico oil spill disaster.

Premier Foods led the FTSE 250, which lost 28.66 points to 10,563.8, after the Hartley's jam to Branston pickle food conglomerate confirmed that it is has received approaches for its Quorn meat-substitute business.

A sale of the division, which makes sausages out of fungi, could net Premier £250m, which would help reduce its £1.4bn debt mountain.

Rumoured bidders include Nestle, Unilever, Danone, Campbell's and host of private equity firms.

Martin Deboo, analyst at Investec Securities, said: "This is probably the one business within Premier that will attract the likes of Unilever and Nestle and their attendant deep pockets and ability to transact quickly."

The shares end the day up 1.7 at 17.9p.

Wellstream Holdings, increased for a third day, climbing 15.5 to 789p after General Electric was named as the group that made an £800m bid for the Brazilian-focused oilfield services group.

The US conglomerate made the approach last month through VetcoGray, an Aberdeen-based oil services subsidiary.

Rentokil Intitial slipped 0.2p to 101.3p despite renewed rumours that a European company is planning a takeover of the pest control and parcel delivery group.

Among the minnows engineering group MS International put on 9.7 to 134.7p after it won a $28.6m contract to supply the US Navy with 30mm naval gun weapons system.

Encore Oil was boosted 7½ to 135p after it discovered a substantial column oil at the Cladhan field in the North Sea. Alan Booth, chief executive, said: "It is still too early to put a precise figure on how large the discovery might be, but we are now very confident that we have a potentially significant commercial accumulation."

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Super-rich buy gold by the ton

The world's wealthiest people have responded to economic worries by buying gold by the bar - and sometimes by the ton - and by moving assets out of the financial system, bankers catering to the very rich told Reuters, the news agency.

Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.

"They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest.

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce on Monday, near the record level reached last week.

"We had a clear example of a couple buying over a ton of gold ... and carrying it to another place," Stadler said. At today's prices, that shipment would be worth about $42 million.

Julius Baer's chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.

"I see gold as an insurance," Van Anantha-Nageswaran told Reuters. "I recommend 10 percent as minimum in portfolios and anything more than that to be used for trading purposes, to respond to short-term over-bought or over-sold signals."

Billionaire financier George Soros, echoing comments from investment guru Warren Buffett, last month described gold as the "ultimate bubble" because it is costly to dig up and has no real value except its market price.

But a rising price for the precious metal has in itself generated more and more demand from investors looking for a way to hedge against a fresh recession. Gold bears no yield and is uncompetitive in an environment of rising interest rates.

The uneasy outlook for inflation, hard currencies and global growth has triggered a five-fold increase in a physical gold fund launched by Pictet one year ago, the Swiss private bank said.

UBS's Stadler said the precious metal has become a staple of investors' portfolios, despite questions about whether it makes for a smart long-term investment.

"If you talk to ultra-high net worth individuals, that level of uncertainty has never been higher in the last two, three, four years," he said. "If they ask me, 'Is inflation going up or are we entering a deflationary cycle?,' I don't know. But obviously nobody knows."

Anthony DeChellis, managing director of Credit Suisse's Americas private banking unit, said at the Reuters summit in New York that clients are more interested in capitalizing on the rise in gold prices than using the precious metal as a safe-harbor investment.

"They're asking, 'If it's a bubble, how far can I ride that bubble,'" he said. "I cannot say we've seen a spike in gold interest, but there's an interest in the phenomenon of it."

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Yen weakens as Bank of Japan surprises markets with rate cut

For months, the central bank had eschewed government calls for more decisive action, such as buying more government bonds, focusing instead on a limited funding scheme.

But in the face of growing evidence that the yen's strength was hurting the economy, the Bank of Japan cut its overnight rate target to a range between zero and 0.1pc from 0.1pc and pledged to buy 5 trillion yen worth of assets.

It also said it would keep its benchmark rate effectively at zero until price stability is in sight. Core consumer prices have been falling from a year earlier since early 2009.

The purchases would roughly match the size of extra stimulus being considered by Prime Minister Naoto Kan's cabinet.

The assets, ranging from government bonds and short-term government securities to commercial paper and corporate bonds, would come under a temporary scheme that would also cover 30 trillion yen of such assets as collateral under an existing loan programme.

"The BOJ is bringing its monetary policy closer to quantitative easing, allowing market rates to hover near zero and pledging to keep a near-zero interest rate policy in the longer term until prices stabilise," said Naomi Hasegawa, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.

BOJ policymakers have signalled in past weeks that they were considering a further easing of policy after Tokyo's intervention in the currency market in mid-September to check the yen's strength offered only temporary relief.

Most market players, however, had expected the central bank to opt for a relatively minor adjustment of its 30 trillion yen loan scheme that supplies banks with funds at its 0.1pc rate.

"These steps are more aggressive than markets had expected. The BOJ's decision is a surprise and will have an impact on currencies due to the message it delivers."

The surprise move weakened the yen against the dollar, pushed up Japanese government bond futures and helped stock prices turn positive.

The decision to cut interest rates was made by a unanimous vote, but board member Miyako Suda opposed the inclusion of government bonds among the types of assets the BOJ could buy using its pool of funds.

The BOJ is not the only central bank under pressure to do more to support an economy that is showing signs of faltering.

Financial markets expect the Fed to embark upon another round of asset buying to bolster a sluggish recovery as early as its November meeting. There are also calls within the Bank of England for further easing, although the bank has kept markets guessing on whether it will indeed do so.

In Japan, slowing export growth, a surprise fall in factory output and companies' worries that the strong yen may hurt the outlook have heightened the case for the central bank to ease policy.

The BOJ had already been edging nearer to quantitative easing by allowing the yen pumped into markets through currency intervention to remain in the financial system, instead of draining it.

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FTSE 100 edges up as travel, utility shares rise

TUI Travel, topped the movers list, with a jump of 4.8pc to 227.2pc after it reported "strenghtened" winter travel bookings.

The company, which released a trading update on Tuesday, stated that full-year results will be “in line with previous guidance” and in addition, that net debt is expected to fall. British Airways likewise rose 2pc to 243.9p.

Utilities climbed by 1pc on boosts to Centrica, National Grid and Severn Trent. Centrica, gaining 1.3pc to 326p, has embarked upon a pilot recycling project, which attempts to turn human waste into renewable gas at Didcot sewage works.

However, performance in utiliies and travel was offset by slumps elsewhere as Inmarsat led the loserboard with a fall of 4.35pc following the sale of 65m ordinary shares in the telecommunications group by US hedge fund Harbringer Capital Partners.

Trading volumes remained thin as investors stay cautious in anticipation of this week's US jobs report – which may provide clues for investors on the health of the world's top economy.

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Nestor Healthcare jumps on talk of raise offer

Shareholders had better not be too picky, though. Acromas is also looking at US-listed Allied Healthcare as part of its plans to consolidate the domiciliary care and healthcare staffing market.

Indeed, The Sunday Telegraph revealed that Acromas has been holding tentative negotiations with Allied Healthcare after it appointed advisers from US investment bank Oppenheimer to look at "strategic options" for the group. Sources, though, cautioned that Acromas has yet to make a formal offer for Allied Healthcare.

Overall, the FTSE 100 jumped by 79.79 points to 5635.76 and the FTSE 250 surged by 118.15 points to 10681.96.

Joshua Raymond, market strategist at City Index, said: "Better-than-expected service sector data out of the UK and eurozone helped indices across Europe. News that the Bank of Japan may expand the size of funds its uses to buy assets and stimulate its economy is also boosting stock demand."

British Airways climbed to the top of the blue-chip leaderboard after better-than-expected traffic figures. The airline's shares surged 15½ to 254.6p after it revealed a 1.3pc increase in revenue passenger kilometres for September, helped by an increase in first and business-class travel. The rise is the biggest gain since August 2008, the month before the collapse of Lehman Brothers.

Citigroup upgraded technology group Invensys to "buy", which helped the shares gain 9.2 to 307.2p. Mark Fielding, an analyst at Citigroup, said: "Concerns over its late cycle nature and the risks to growth in rail have weighed on the shares over the last year. However, our analysis suggests continued growth... at rail. When this is combined with recovery continuing across the rest of the portfolio we see renewed attractions in the share."

InterContinental Hotels Group advanced 19p to £11.46 as JP Morgan Cazenove gave the stock a push on valuation grounds. Tim Barrett, an analyst at JP Morgan Cazenove, said: "The outlook for 2011 is favourable and likely to be an increasing focus for investors after Marriott and Starwood publish 2011 guidance with their third-quarter results. We believe low supply growth in 2011 is likely to support [revenue per available room] growth of between 5pc and 8pc in 2011."

BT Group put on 2.7 to 148½p amid talk Ofcom will this week announce a decision on superfast broadband that is likely to be favourable to the telecoms company.

Tui Travel rallied 9.1 to 225.9p after it said in a trading update that it had a good summer and bookings were picking up. Elsewhere in the sector, rival Thomas Cook increased 6.7 to 179¾p.

Hedge fund group Man Group perked up 9½ to 227.1p after it said its Athena Guaranteed Futures rose 0.55pc last month and had risen 10.5pc over the past 12 months.

Gold mining stocks were in vogue as the price of the precious metal flirted with a fresh high. Randgold Resources climbed 195p to £66.55.

Rising risk appetite gave base metal mining companies and banking stocks a lift. Anglo American put on 103½p to £26.41 and Barclays edged up 9 to 308.8p.

Aviva advanced 3.4 to 396.2p despite the fact that Bank of America Merrill Lynch argued that the latest "bid" related spike in the transport group's shares will unwind as the likelihood of any corporate activity lessens.

On a less positive tack, Inmarsat fell 26 to 629p. After the market closed yesterday, Harbinger Capital confirmed it had sold 65m shares - about 14pc of the company – at 630p a share in a move that raised £410m. The share sale was larger than expected and triggered speculation Harbinger could sell the rest of the its holding once the 180-day lock-up expires.

Among the smaller companies, Computacentre jumped 22.9 to 322.9p as Investec upgraded the stock to "buy" from "hold". "We believe earnings quality has improved through operational efficiencies, managed services traction and cost savings. The outlook suggests a continuation of these trends, reasonable revenue progress and modest forecast momentum," said Julian Yates, an analyst at Investec.

"Buy" advice from Barclays Capital lifted Carphone Warehouse 3¼ to 266p. Karen Howland, an analyst at Barclays Capital, said: "We expect Carphone Warehouse to report another set of strong figures during its second-quarter results on November."

Homeserve also rallied 17.1 to 459.1p after Credit Suisse took up coverage with an "outperform" rating and a 720p price target. Analysts at Credit Suisse said: "HomeServe offers one of the most compelling combinations of growth, profitability and value in Europe."

Weir Group put on 33p to £14.86 as Bank of America Merrill Lynch argued it is likely to offer "superior growth" in an economic cycle that is "settling down".

However, oil services company Wood Group slipped 3.3 to 424.6p as Morgan Stanley downgraded it to "equalweight". "The recovery we identified in engineering as the key 'swing factor' for its earnings recovery in 2011 is being priced in," said Martjin Rats, an analyst at Morgan Stanley.

Vallar, Nat Rothchild's investment vehicle, is still trading below its issue price of £10.00 a share. When Vallar floated in July, investors had high hopes for the financier's plans to consolidate some of the mining sector. However, Vallar, up 15 to 920p, has failed to carry out a transaction since its float and some investors are preparing to kick up a fuss if the shares fail to move higher.

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US shares rally on stimulus hopes

 Investors? confidence was lifted holding of interest rate in Australia, Japan cutting rates to zero and calls for the Fed to do more to spur growth.

The Dow Jones Industrial Average closed up 193.45 points, or 1.8pc, at 10944.72, its strongest since May 3. The Standard & Poor’s 500 fared just as well, ending up 2.1pc at 1160.75.

Investors’ confidence was lifted on a day that began with Australia’s central bank unexpectedly deciding to keep interest rates on hold, rather than raise them, and ended with Charles Evans, the president of the Federal Reserve Bank of Chicago, arguing that the Fed must do more to spur growth in the world’s biggest economy.

In between, the Japanese central bank delivered a surprise rate cut and pledged to buy more bonds. The Nikkei 225 index closed up 1.5pc at 9,518. 76 as did markets across Europe. The FTSE 100 finished 79.79 points higher at 5,635.76.

“Central banks didn’t have a choice but to take steps like this, and it’s what the market wanted to see,” said Uri Landesman, president of Platinum Partners in New York.

However, it wasn’t just central bankers that lifted markets on Wall Street. A widely-watched index of America’s services industry from the Institute for Supply Management rose more than expected last month.

Investors also eyed with some optimism the third-quarter earnings season for US companies, which aluminium producer Alcoa kicks off on Thursday.

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FTSE 100, global markets rise on hopes of more stimulus

By midday, the London's benchmark index was up 41.12 points, or 0.7pc, to 5,676.88, following gains of 1.4pc on Tuesday, its highest close since late April.

Miners were the biggest support to the index as gold hit a record high and copper rose to its highest since July 2008 as the demand outlook brightened on expectations that governments would do more to stimulate the global economy.

Antofagasta, Xstrata, Anglo American and Kazakhmys added 3.6pc to 4.2pc.

The Bank of Japan unexpectedly cut interest rates on Tuesday, supporting a view that other governments will act further to bolster economic recovery.

The Nikkei rose 1.8pc overnight to 9691.43, while in lunchtime trading in Europe, France's CAC 40 and Germany's DAX were both up more than 1pc.

In London, Energy firms were also stronger with crude oil hitting its highest level in five months. Royal Dutch Shell gained 1.4pc.

In the United States, the Institute for Supply Management's index showed the pace of growth in the US services sector accelerated more quickly than forecast in September, while hiring also picked up.

German manufacturing orders rose in August by 3.4pct on the month, surpassing forecasts.

"Macro stuff like the industrials order number is giving heart to the bulls while the bears are getting squeezed," Giles Watts, head of equities at City Index, told Reutuers. "There's a feeling that the market can keep going higher at the moment."

A survey by the British Retail Consortium showed that a jump in the cost of agricultural commodities drove British shop price inflation to a five-month high in September.

Autonomy was the top faller, down 12pct after it said it expected to review its full-year internal model with a revenue reduction of around 3pc. This wiped out most of the 16pc rise seen in September.

Sainsbury was also among the top fallers, down 1.1pc, after reporting sales at the top end of forecasts.

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Mining shares lift FTSE 100, buoyed by bullish outlook for commodities

Meanwhile, currency concerns relating to the possibility of renewed QE and a prolonged period of negative real interest rates in the US are likely to drive strong investment demand for gold and silver, said Morgan Stanley.

Xstrata – which rose 46½p to £12.86 – and Kazakhmys, up 56p to £14.83, are the broker’s top picks from the London market.

African Barrick Gold also climbed 22 to 638p as Morgan Stanley raised its price target to 762p from 668p to take into account higher gold price forecasts and the prospect of a re-rating following third-quarter results on October 22, which the broker thinks should restore confidence in the company after the production issues in the second quarter.

Hannah Kirby, an analyst at Morgan Stanley, said: “We expect African Barrick Gold to report that Buzwagi is back on track given the corrective measures put in place at the mine. The resulting July run rates from Buzwagi also suggest that this is the case.”

Overall, the FTSE 100 moved 45.63 points higher to 5681.39 while the FTSE 250 jumped 118.27 points to 10800.23.

British Airlines put on 11½ to 266.1p as Barclays Capital raised its target price to 350p from 320p in the wake of strong traffic figures released earlier in the week.

A JP Morgan Cazenove upgrade to “buy” boosted Capita. The broker argued that near-term risks from public sector spending cuts are diminishing whilst the longer-term opportunities are increasing. The shares were also given a boost by a contract win. The company said it has been appointed by West Sussex County Council as the authority’s IT Infrastructure partner. The seven-year contract is worth £56m. The shares rose 13½ to 792p.

Inmarsat rallied 15 to 644p after Barclays Capital upgraded the shares to “equal weight”, arguing that risks to the company are fully “priced in” the shares.

Tesco benefited from Credit Suisse raising its price target to 500p from 460p. “Our initial big picture reaction to the results and analyst meeting was of a company now emerging from recession (albeit some countries/divisions faster/slower than others) more confident of now delivering higher returns,” said analysts at Credit Suisse. Tesco advanced 9.4 to 440.6p.

Property stocks made it onto the leaderboard as Nomura upgraded the sector to “neutral” from “bearish”. Mike Prew, an analyst at Nomura, said his contrarian forecast of a dip in commercial real estate values is now fully priced into share ratings and should be limited to around 5pc by extraordinarily low long-term interest rates.. Hammerson perked up 10.3 to 412p while Land Securities put on 13 to 676p.

On a less positive tack, Autonomy plummeted 301p to £15.51 after the software company lowered its forecast for full-year revenue by about 3pc. Goldman Sachs took the company off its “conviction buy” list and Numis downgraded the stock to “sell”. Analysts at Numis said yesterday’s statement indicates that product revenue will fall between 10pc and 15pc in the fourth quarter.

Among the second liners, a better-than-expected trading update and traffic figures helped Easyjet take off. The shares climbed 46.4 to 433.3p.

Charter International added 25 to 747½p following news that Thermadyne, a US listed metal cutting and welding products manufacturer, accepted a $422m bid from Irving Place Capital, a private equity firm. Numis advised clients to buy Charter as the broker believes M&A is still a theme for the sector and UK engineering companies are “in play”.

Ladbrokes also gained 1.6 to 136½p despite a Credit Suisse downgrade to “underperform”.

However, De La Rue slipped 12½ to 643p as UBS reiterated its “sell” rating on the stock. UBS analysts said they believe De La Rue will lose part of the India contract gradually over the next two years as suppliers increase capacity and India builds up its own capacity. As a result they cut their forecasts by a further 10pc.

UBS also continues to see downside risk as we do not know the profit contribution from India and expects the reputational damage to linger for quite a period of time.

Gemfields jumped 5¼ to 10½p after full-year results showed soaring emerald sales. The company sold just under $20m worth of the green gemstone, against less than $1m the previous year, as the market for the gems recovered.

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Sage takes wooden spoon as bid talk fades

Sage - the biggest loser in the blue chip index on Friday - has been a strong performer in the past few weeks amid gossip it could soon be fending off bids from either SAP, Microsoft or a private equity firm.

However, yesterday UBS downgraded the stock to "sell", arguing it is sceptical about the recent M&A speculation. Michael Briest, an analyst at UBS, said: "We do not see any obvious trade buyers, and feel financial buyers would be unlikely to make a compelling return above 300p at currently accepted leverage levels."

He also said Sage's new chief executive, Guy Berruyer, faces a number of issues including the need for a coherent software-as-a-service strategy; competition from financial buyers for strategic assets; and the maturity of its support-led growth model.

Overall, the FTSE 100 fell sharply in morning trade but recovered in the afternoon despite worse-than-expected US jobs figures. The blue-chip index eventually closed down just 4.52 points at 5657.61. The FTSE 250 lost 40.71 points to 10724.91.

Fresnillo gave up 41p to £12.48 as Bank of America Merrill Lynch downgraded the stock to "underperform" from "neutral".

However, the rest of the mining sector was on good form despite falling base metal prices. Xstrata gained 36p to £12.96 and Anglo American rose 61½p to £27.26.

In the banking sector, Barclays drifted lower as traders chewed over news that Normura sold 220m shares in the bank for Abu Dhabi's Sheikh Mansour bin Zayed Al Nahyan as part of a complex derivatives trade to protect against a loss in value of his 6.3pc stake. Some analysts, though, thought it was actually Nomura that was seeking to hedge its exposure to the bank. Barclays shares lost 6.8 to 297¼p.

Broker downgrades weighed on Autonomy. Panmure Gordon, for example, cut it to "hold" from "buy", while UBS lowered its rating to "neutral" from "buy".

On a more positive tack, Marks & Spencer benefited from several broker upgrades. Credit Suisse raised its rating to "neutral" from "underperform". Tony Shiret, an analyst at Credit Suisse, said: "The market nearly always buys into strategy until it does not work, so now seems a good time to take a more open-minded stance in the run-up to the interims [results] on November 9." The shares edged up 1 to 411p.

On the mid-cap index, Thomas Cook's plans to merge its high street travel and foreign exchange business with the Co-operative Group's lifted its shares 6.1 to 185¾p.

Heritage Oil climbed 24 to 346p thanks to positive broker comment. UBS took up coverage of the stock with a very bullish piece and a 430p price target. Melanie Savage, an analyst at UBS, said the company was her "top pick" of the European exploration and production sector. "Heritage provides exposure to relatively low-risk, high-impact exploration upside in Iraqi Kurdistan and Malta in the near term," she said.

JP Morgan Cazenove was also positive on Heritage. Analysts at the broker said: "Following completion of the Ugandan asset sale and payment of a 100p per share special dividend, Heritage has rescaled itself to be a high-impact explorer, but with a proven track record and very strong balance sheet."

Mining company Petropavlovsk dropped 51p to £10.20 after it cut the size of the Hong Kong initial public offering of IRC, its iron ore unit, by half to $249m due to disappointing demand. In a statement, the company said: "The total demand from investors exceeded IRC's minimum requirements for the shares to be issued by it, but did not meet the company's highest expectations."

Investors were also rattled earlier this week as the Petropavlovsk warned of delays in receiving equipment at its Pioneer gold mine and said it was striving to meet an ambitious production target.

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Stimulus talk weighs on UK gilt yields

The yield fell 8 basis points to 2.89pc after a weak US jobs survey boosted speculation that central banks worldwide could provide a second wave of monetary stimulus.

The ADP Employer Services report showed the US economy unexpectedly shed 39,000 private sector jobs in September, confounding expectations for an increase.

The figures had a particular resonance because they came two days before the US government’s official monthly employment release and after top Charles Evans, a top US Federal Reserve official, was quoted in the Wall Street Journal as saying the US central bank should do “much more” monetary easing.

“We’re seeing a continuation of the bullish theme that is being driven by real money investors,” said Matteo Regesta, rates strategist at BNP Paribas.

Mr Regesta said gilts were benefiting not just from growing expectations of more quantitative easing in the United States but also from anticipation Britain’s government would maintain its tough deficit-cutting line in its Comprehensive Spending Review on October 20.

“The government is under a lot of pressure to deliver on fiscal tightening,” he said. “That, combined with a weak recovery, is providing support to gilts.”

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Australian dollar hits 27-year-high

This afternoon the dollar hit 98.74 US cents, the highest level since January 1983, when the currency was first floated and valued at 97.65 US cents.

At the local 5pm close, the Australian dollar was trading at 98.36 US cents. It was also buying 70.7 euro cents, 62 pence and 81.6 yen.

The dollar was strengthened by monthly government figures that showed the unemployment rate steady at a low 5.1 per cent in September, with 49,500 new jobs created in that month, well ahead of forecasts.

Most of the new jobs were reported to have been created in the booming domestic mining industry.

The value of the dollar rose by 8.3pc against the greenback in the past month as speculation that the US Federal Reserve would expand its economic stimulus programme.

Analysts in Australia now expect the dollar to reach parity with the US dollar in the next few months.

Craig James, an economist at CommSec, told the Australian Broadcasting Corporation that the Australian dollar had benefited from a strong local jobs market and the prospect that the Reserve Bank would raise interest rates in October.

He said that consumers, motorists and Australians travelling on overseas holidays would benefit from the strong dollar, but that the local tourism market and exporters would suffer.

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Banks and commodities drag FTSE 100 into red

Banks were the biggest laggards as an effective stake sale by a key Abu Dhabi investor in Barclays helped send its shares down 2.5pc.

Abu Dhabi exercised 131.6m warrants in the bank, equivalent to a 1.1 pc stake, and simultaneously entered into a hedging arrangement with Nomura, it said in a statement after Thursday's close.

Energy stocks were also languishing as crude prices fell by $1.30. BP shares fell 0.9 pc. Miners retreated after early gains as nerves set in ahead of the payrolls data. Rio Tinto lost 0.7 pc while silver miner Fresnillo fell 4.6 pc.

By midday, the FTSE 100 was 47.82 points lower at 5614.50, after it closed 0.3pc lower on Thursday on a wave of placings and block trades, signalling that some investors reckon the market has reached its peak.

On Thursday, Kazakhmys was the worst performer after broker Credit Suisse sold 9.35m shares – 1.75pc of the company – on behalf of the Orleans Trade & Investment Corporation (OTIC). Vladimir Ni, a non-executive director of Kazakhmys who died in the summer, had transferred 9.35m shares to OTIC.

Lloyd's of London insurer Catlin also dipped 16½ to 325p as Morgan Stanley placed 14m shares – around 3.9pc of the company – at 325p. Traders reckon the seller and buyer were long-only instiutions.

Thursday's deals follow a string of other share sales earlier in the week. Harbinger Capital sold a 14pc of its stake in Inmarsat, down 7½ to 636½p, while Vladimir Kim, chairman of Kazakhmys, disposed of 11pc of his shareholding in the mining giant to the Kazakh government, pocketing nearly $1.3bn in the process.

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Sage takes wooden spoon as bid talk fades

Sage - the biggest loser in the blue chip index on Friday - has been a strong performer in the past few weeks amid gossip it could soon be fending off bids from either SAP, Microsoft or a private equity firm.

However, yesterday UBS downgraded the stock to "sell", arguing it is sceptical about the recent M&A speculation. Michael Briest, an analyst at UBS, said: "We do not see any obvious trade buyers, and feel financial buyers would be unlikely to make a compelling return above 300p at currently accepted leverage levels."

He also said Sage's new chief executive, Guy Berruyer, faces a number of issues including the need for a coherent software-as-a-service strategy; competition from financial buyers for strategic assets; and the maturity of its support-led growth model.

Overall, the FTSE 100 fell sharply in morning trade but recovered in the afternoon despite worse-than-expected US jobs figures. The blue-chip index eventually closed down just 4.52 points at 5657.61. The FTSE 250 lost 40.71 points to 10724.91.

Fresnillo gave up 41p to £12.48 as Bank of America Merrill Lynch downgraded the stock to "underperform" from "neutral".

However, the rest of the mining sector was on good form despite falling base metal prices. Xstrata gained 36p to £12.96 and Anglo American rose 61½p to £27.26.

In the banking sector, Barclays drifted lower as traders chewed over news that Normura sold 220m shares in the bank for Abu Dhabi's Sheikh Mansour bin Zayed Al Nahyan as part of a complex derivatives trade to protect against a loss in value of his 6.3pc stake. Some analysts, though, thought it was actually Nomura that was seeking to hedge its exposure to the bank. Barclays shares lost 6.8 to 297¼p.

Broker downgrades weighed on Autonomy. Panmure Gordon, for example, cut it to "hold" from "buy", while UBS lowered its rating to "neutral" from "buy".

On a more positive tack, Marks & Spencer benefited from several broker upgrades. Credit Suisse raised its rating to "neutral" from "underperform". Tony Shiret, an analyst at Credit Suisse, said: "The market nearly always buys into strategy until it does not work, so now seems a good time to take a more open-minded stance in the run-up to the interims [results] on November 9." The shares edged up 1 to 411p.

On the mid-cap index, Thomas Cook's plans to merge its high street travel and foreign exchange business with the Co-operative Group's lifted its shares 6.1 to 185¾p.

Heritage Oil climbed 24 to 346p thanks to positive broker comment. UBS took up coverage of the stock with a very bullish piece and a 430p price target. Melanie Savage, an analyst at UBS, said the company was her "top pick" of the European exploration and production sector. "Heritage provides exposure to relatively low-risk, high-impact exploration upside in Iraqi Kurdistan and Malta in the near term," she said.

JP Morgan Cazenove was also positive on Heritage. Analysts at the broker said: "Following completion of the Ugandan asset sale and payment of a 100p per share special dividend, Heritage has rescaled itself to be a high-impact explorer, but with a proven track record and very strong balance sheet."

Mining company Petropavlovsk dropped 51p to £10.20 after it cut the size of the Hong Kong initial public offering of IRC, its iron ore unit, by half to $249m due to disappointing demand. In a statement, the company said: "The total demand from investors exceeded IRC's minimum requirements for the shares to be issued by it, but did not meet the company's highest expectations."

Investors were also rattled earlier this week as the Petropavlovsk warned of delays in receiving equipment at its Pioneer gold mine and said it was striving to meet an ambitious production target.

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Wave of placings signals FTSE 100 near peak

Elsewhere, wealth management group Hargreaves Lansdown fell 18.9 to 452p as Stephen Lansdown raised £58m by selling almost 3pc of the company. Broker Numis Corporation placed 13.5m shares at 429p, reducing Mr Lansdown's personal stake to 20.1pc.

Yesterday's deals follow a string of other share sales earlier in the week. Harbinger Capital sold a 14pc of its stake in Inmarsat, down 7½ to 636½p, while Vladimir Kim, chairman of Kazakhmys, disposed of 11pc of his shareholding in the mining giant to the Kazakh government, pocketing nearly $1.3bn in the process.

It was not just the London market that has seen a huge rise in placings. In continental Europe, Renault sold most of its stake in Volvo, raising €3.01bn.

Overall, the FTSE 100 shed 19.26 points to 5662.13 and the FTSE 250 lost 34.61 points to 10765.62.

Antofagasta was under pressure, retreating 64p to £12.49. as Citigroup downgraded the shares to "sell" on valuation grounds. The broker advised clients to seek cheaper copper exposure through its top selections in UK mining of either Xstrata, down 26½p to £12.60, or Anglo American, which fell 87½p to £26.64.

Other mining stocks were on the backfoot following strong gains earlier in the week. Rio Tinto slipped 61p to £38.65.

Some banks were in the doldrums after Halifax found that house prices plunged in September by the most since its records began a quarter of a century ago. The Halifax said that "renewed uncertainty" about the British economy caused the average cost of a home to fall 3.6pc from August. Lloyds Banking Group gave up 2.4 to 73.9p and Royal Bank of Scotland lost 1.6 to 47.8p.

The negative sentiment also weighed on some of the housebuilders, too. Barratt Developments declined 4.4 to 94.8p.

In the tobacco sector, Imperial Tobacco slid 5p to £19.05 despite a push from Morgan Stanley, which reiterated its overweight rating. Toby McCullagh, an analyst at Morgan Stanley, said: "The company's relative organic growth prospects are better than the market expects". He added rapid de-leveraging, incremental cost savings post realisation of the Altadis synergies and successful international partnering could add a further leg to Morgan Stanley's investment case.

Among the risers, ICAP perked up 7.1 to 456.6p as Evolution reiterated its "buy" rating on the shares. Bill Barnard, an analyst at Evolution, said: "We feel September's electronic trading data (... 3rd highest month after April and May, which were dominated by the sovereign debt crisis) helps to underpin our first-half and full-year forecasts as well as supporting our view that a cyclical recovery is well underway at ICAP."

Marks & Spencer surged 19.2 to 410p after it reported second-quarter sales growth that beat analysts' estimates and that it won market share in clothing.

The rest of the retail sector was also in vogue thanks to the positive sentiment generated by the Marks and Spencer figures. Home Retail Group put on 4.8 to 214.9p and Kingfisher climbed 2.9 to 232.3p.

J Sainsbury, meanwhile, edged up 0.3 to 387.4p as Credit Suisse raised its target price to 330p from 300p. The broker, though, reiterated its "underperform" rating on the stock.

Halfords was hit by a broker downgrades following its trading statement, which showed second quarter sales had fallen 6.3pc due to teething problems at a new distribution centre. KBC Peel Hunt downgraded the stock to "hold" from "buy". "With questions over bike ranges and Autocentre trading, coupled with poor market communication, we see the shares struggling for support," John Stevenson, an analyst at KBC Peel Hunt. The shares tumbled 39 to 408p.

Petropavlovsk shed 66 to £10.71 on talk it is having major production problems and is unlikely to meet its own full-year forecasts.

Heritage Oil also slipped 3.7 to 322p despite chatter it will soon announce a positive drilling update.

However, Mulberry perked up 27½ to 440½p after the maker of Bayswater luxury handbags after the company said its full-year results are expected to significantly exceed market expectations.

Antrim Energy jumped 8 to 70½p after it announced a joint venture with Premier Oil, down 1 to £16.74, to look at developing it Fyne asset in the UK North Sea.

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