Weak dollar tempts FTSE investors

The FTSE 100 Index closed up 30.4 points at 4417.9

Commodity stocks buoyed the FTSE 100 Index as investors took cheer from more positive signs for the global economy.

Figures showed Japanese industrial production rising at its fastest pace in 56 years during April, while US GDP data due later was expected to show the pace of recession slowing.

The Footsie was up 72.6 points at 4460.2 by the mid-session as dollar weakness encouraged investors into oil and metals, with takeover speculation among miners adding to the mix.

Crude oil reached a new six-month high above 66 dollars a barrel, and a surprise bounce in May house prices from the Nationwide also helped sentiment.

Speculation from Nomura over a potential merger between miners Xstrata and Anglo American saw the duo rise 40p to 689.5p and 71p to 1760p respectively as the sector dominated the risers board.

Lonmin was the top blue-chip performer with a gain of 131p to 1448p or 10%, while gold miner Randgold Resources climbed 122p to 4510p as spot gold prices reached a three-month high.

Oil majors BP and Royal Dutch Shell rose 8.25p to 516.5p and 38p to 1699p respectively, although prospector Tullow Oil proved the exception to the wider commodity gains after a disappointing drilling update from Uganda saw it drop 19p to 1000p.

Airline British Airways was another faller, down 0.5p to 156.3p on the higher oil price and downbeat comments from ratings agency Moody's.

The 1.2% rise in Nationwide house prices lifted housebuilders, with Taylor Wimpey up 2p at 31.25p, Persimmon 18.75p stronger at 364.25p and Redrow 9.75p higher at 199.75p.

Broadcaster ITV was the leading FTSE 250 riser after the OFT advised the Competition Commission to consider changes to the regulatory regime introduced in the wake of ITV's creation from the merger of Carlton and Granada in 2003. Shares jumped more than 9% or 3.5p to 40.5p.