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Miners help FTSE to recover, Rio Tinto leads higher
February 12, 2015 / 9:37 AM / 3 years ago

Miners help FTSE to recover, Rio Tinto leads higher

* Blue-chip FTSE 100 index rises 0.3 percent

* Rio Tinto up on buyback plan, higher dividend

* UK mining index advances 1.6 percent

By Atul Prakash

LONDON, Feb 12 (Reuters) - Britain’s top share index rose on Thursday, with Rio Tinto leading the market higher after announcing plans to return $2 billion to shareholders and offering a higher than expected dividend despite its worst half-year profit in two years.

The market also got support after Russian President Vladimir Putin said that there was an agreement on Ukraine, with a ceasefire starting from February 15.

Global miner Rio advanced 2.5 percent, the top gainer in the FTSE 100 index, following its buyback announcement that came after it cut costs, capital spending and debt to shore up its cash flows against collapsing commodity prices.

“Rio numbers are well received as expectations of a buyback was fulfilled and a higher dividend will keep shareholders happy. With not much out there on the acquisition front, the best thing it could do was to reward its shareholders,” said Securequity sales trader Jawaid Afsar.

The British mining index rose 1.6 percent, while the blue-chip FTSE 100 index was up 0.3 percent at 6,841.01 points by 0930 GMT after falling in the previous four sessions.

However, investors stayed cautious due to lingering concerns over Greece and Ukraine. After seven hours of crisis talks in Brussels, Greece’s new leftist government and its international creditors failed to agree on a way forward on the country’s unpopular bailout and will try again on Monday.

“Traders are still optimistic that some kind of a compromise can be achieved before Greece will possibly run out of money later this month,” said Markus Huber, senior analyst at Peregrine & Black.

Among other movers, BT Group fell 0.5 percent after the company kicked off its 1 billion pound ($1.52 billion) placing, saying it would launch an underwritten accelerated bookbuilding process immediately to fund its 12.5 billion pound acquisition of mobile operator EE.

The world’s largest advertising company WPP rose 1 percent after its peer Publicis said business would pick up in the second half of this year. (Reporting by Atul Prakash; Editing by Crispian Balmer)

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