Footsie continues winning streak as miners advance

The Footsie finished 27.49 points up at 5132.94 and has now advanced more than 6 per cent since Monday's close amid slowly recovering risk appetite among investors.

In a very quiet day for corporate news, a combination of broker upgrades, improved sentiment and higher metal prices underpinned the heavyweight sector's gains.

In London, fears of UK recovery being choked off by rate hikes were lifted when factory gate prices slowed more than expected in June, reducing the pressure for tightening to control inflation.

Markets overlooked poorer data on the UK goods trade gap, which widened to 8.1bn in May amid little sign of help from a weaker pound.

Sterling stood just below 1.51 against the dollar and 1.19 against the euro.

The single currency has strengthened in recent days as confidence over the eurozone picks up.

In the US, despite the week's gains, marked by volatility and low volume, sentiment remains fragile. Many investors are concerned that the global economy could experience a double-dip recession. Those fears have driven the S&P 500 down about 12 per cent from its most recent closing high in late April, and down about 4 per cent so far this year.

"Everyone is anxious to see whether earnings are good enough to outweigh some of the more significant macroeconomic trends we're facing," said Jordan Posner, senior portfolio manager at Matrix Asset Advisors in New York.

"Everyone is marking time until we get some numbers."

Mining firm Antofagasta was the top flight's best performer, gaining 341/2p to 886p, or 4 per cent, as Citigroup brokers upgraded it to a buy rating.

BT Group was also on the front foot after the telecoms giant reached a deal with union leaders for an "unprecedented" three-year pay rise worth more than 9 per cent.

While the City estimated the deal could cost around 50m extra a year by 2013, the deal averted the threat of a costly strike by workers and helped shares to rise 4p to 140p.

Medical instruments firm Smith & Nephew was also in demand amid vague bid gossip. Shares added 23p to 607p.

One of the biggest falls in the top flight was posted by National Grid after analysts at Citigroup removed their buy rating on the stock and said the utility may sell its US business in order to protect its dividend. Shares fell 71/8p to stand at 4947/8p.

In the FTSE 250 Index, shares in roofing and insulation firm SIG rose 23/8p to 1067/8p after it forecast better-than-expected half-year profits due to a recovery in sales over the second quarter of the year.

Engineering firm Bodycote set the pace in the second tier after it said it was on course to exceed market forecasts for full-year operating profits. Shares were 14 per cent higher, up 267/8p to 2175/8p.

Elsewhere, shares in recruitment firm Michael Page International lifted 75/8p to 3933/8p after growth in Asia helped boost second quarter profits.

Bovis Homes shares were ahead 53/4p to 3541/2p after announcing plans to restore its dividend towards the end of the current financial year.

A solid trading update from Bovis was overshadowed by a cautious assessment of the sector by broker HSBC. The review caused Bellway to fall by 12p to 612p and Redrow to slip 31/2p to stand at 1093/4p.

The biggest Footsie risers were Antofagasta, Smith & Nephew , Prudential up 19p to 537p and Invensys up 83/4p to 2675/8p.