Miners Lead U.K. Stocks Higher; Banks Weigh

U.K. miners led the London benchmark index into positive territory on Tuesday, as they cheered a positive gold forecast from analysts.

The FTSE 100 index UK:UKX -0.19% picked up 0.3% to 5,835.36

Mining firms were the main driver for gains after Deutsche Bank lifted price estimates for copper and said gold prices likely will break the $2,000 an ounce level in the first half of 2013.

“We believe that expanding monetary conditions globally will provide the catalyst for higher gold prices,” analysts at the bank said.

Gold miner Randgold Resources Ltd.UK:RRS +1.37% rose 2.5%, while peer firm Fresnillo PLC UK:FRES +2.07% gained 1.8%. Sector heavyweight and one of the world’s largest copper miners Rio Tinto PLC UK:RIO -0.78% AU:RIO +1.16% RIO +0.26% rose 1.4%.

Building-materials supplier Wolseley PLC UK:WOS -0.56% added 2.4% after it increased its full-year dividend, even as pretax profit for fiscal 2012 declined.

Babcock International Group PLC UK:BAB +2.44% jumped 3.7% as the engineering-services provider said market conditions continued buoyant and it remained confident that it could meet expectations for the year.

Some banks bucked the positive trend in London. Royal Bank of Scotland Group PLCUK:RBS -3.34% RBS -2.23% and Lloyds Banking Group PLC UK:LLOY -2.38% LYG -1.59% each dropped more than 2.3% after UBS cut the banks to neutral from buy.

Insurance firm Prudential PLC UK:PRU -0.06% lost 0.4% as Credit Suisse lowered its rating on the European insurance sector to benchmark from overweight. Peer firm Standard Life PLC UK:SL -0.14% fell 0.5%, while Admiral Group PLC UK:ADM -0.19% shed 0.8%.

Market Watch News