Renewed hopes for a mining merger involving Xstrata and commodities trader Glencore added to the recently upbeat mood in the sector today.
With Glencore reviving the terms of its offer, Xstrata shares were 29p higher at 1042.5p as investors took the view that 3.05 Glencore shares for each of the miner's would be enough to secure the tie-up.
Recent moves by the European Central Bank to tackle the region's debt crisis added to the positive mood in the resources sector, although the FTSE 100 Index remained close to its opening mark, down 8.9 points at 5785.4.
Vedanta Resources topped the risers board with a gain of 32.5p to 1008p, while Xstrata was not far behind with an improvement of 2% or 24p to 1038p. The impact of the Xstrata deal meant Glencore shares were 4.8p lower at 373.2p.
It was joined on the FTSE 100 Index fallers board by Associated British Foods, despite another strong update from budget retail chain Primark.
AB Foods, which also owns British Sugar and grocery businesses including Kingsmill and Ryvita, said second half profits would be substantially ahead of last year. However, shares fell 17p to 1289p after it also said it expected a one-off charge of £100 million relating to a meat factory in Australia.
The pound at 9am was 1.6008 dollars compared to 1.6016 dollars at the previous close. The euro at 9am was 0.7988 pounds compared to 0.7989 pounds at the previous close.
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