FTSE closes marginally higher as gold surges to new highs

END-OF-DAY REPORT: Headline shares closed marginally higher, having spent much of the session in the red, as commodities improved and gold surged over $1,300 an ounce, and with M&A chatter inspiring gains for insurers.

At the close of business, the FTSE100 was up 5.02 points at 5,578.44 with the FTSE250 little off 10.25 points at 10,552.41 and the FTSE Smallcaps 2.6 points better at 2,969.12.

After plunging early in the session in London, commodity shares had pared losses by midday and turned positive by the close, with gold hitting new highs, and inspired by a rally on Wall Street.

Mining shares were mixed, with Vedanta Resources the weakling of the family, down 31p at 2,261p on being downgraded to hold from buy at Deutsche, while Lonmin lost 14p at 1,678p and ENRC edged down 6.5p at 900.5p.

On the upside, Xstrata rallied 28.5p at 1,249p and Rio Tinto shone with a gain of 47.5p at 3,751p.

Financial stocks were out of sorts, with news of falling profits at Man Group sending the shares down 5.2p at 214.1p.

Royal Bank of Scotland led the banks lower following news of further job losses, off 0.76p at 48.05p, while Barclays lost 1.7p at 309.05p and Lloyds gave back 0.59p at 75.25p.

The leisure industry was hit by news from midcap tour operator Thomas Cook that UK costs were hurting profits. Thomas Cook shares slid 12.89p at 171.7p, while blue chip peer TUI Travel fell 2.8p at 218.4p on the read across.

Commercial property REITs were under the cosh, with Hammerson sliding 8.6p at 395p, British Land off 0.4p at 471.8p and Land Securities 2p lower at 639.5p.

Plumbing giant Wolseley tumbled 25p at 1,495p after a downgrade to underperform from hold at Seymour Pierce, although the target price stays 1,350p.

The best blue chip gainer was commercial software supplier Sage, still enjoying its broker upgrade from the previous session, adding 13.7p at 280p.

Insurers figured among the gainers, with Resolution adding 8.3p at 244.2p and Prudential ahead 22p at 637.5p, although others registered modest losses.

Other notable blue chip winners included precious metals processor Johnson Matthey, up 16p at 1,776p, and global caterer Compass Group, 2.5p better at 541p.

• What the papers say: Swiss move of Midlands-based Wolseley dominates today’s financial headlines: click here