LONDON MARKETS: Miners Boost FTSE 100 After Bullish Citi Call

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Mining firms led U.K. stocks higher on Thursday after on upbeat analyst call on the sector, while Associated British Foods PLC topped the list of decliners after a sales update.

The FTSE 100 index gained 0.1% to 6,825.74, on track for a fifth straight day of gains.

Miners posted some of the biggest gains after Citigroup moved its 12-month stance on the sector to bullish from neutral, marking the first upbeat call in three years. Within the industry, Citi said it prefers BHP Billiton PLC (BHP) , up 3.8%, Rio Tinto PLC (RIO), 2.5% higher, and Glencore Xstrata PLC (GLCNF), rising 1.8%. Metals prices were, however, lower across the board.

"While we remain concerned about the potential long-term structural demand story for commodities in China, and we are cognizant of a potential seasonal slowdown in the first quarter of this year, our move to bullish reflects better bottom-up fundamentals, particularly from the major miners," the Citi analysts said.

"We would rather be too early than too late in making this call," they added.

Also on the rise, United Utilities Group PLC climbed 4% after Morgan Stanley lifted the firm to overweight from equal weight.

On a more downbeat note, shares of Associated British Foods PLC lost 2.9% after the food and retail firm said its budget clothing chain Primark posted strong sales around Christmas, but that its sugar business was weaker than expected.

Outside the main index in London, shares of Premier Oil PLC slid 6.6% after the oil exploration and production company said output in 2013 was in the middle of its guidance.

Argos and Homebase owner Home Retail Group PLC gained 3% after saying it expects full-year adjusted earnings to be at the top end of market expectations after a good trading period for both units.

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