M I N I N G c o m p a n i e s helped the London market hold its head above water yesterday as higher commodity prices boosted confidence.

Gains were driven by positive economic news from Japan and the US, while the price of oil hit a fresh six-month high.

The weakness of the dollar encouraged investors into oil and metals, giving miners and the oil and gas sector extra impetus. The FTSE 100 Index closed up 30.4 points at 4417.9.

A raft of economic data, including US GDP figures showing the pace of recession slowing, cheered the market.

Miners crowned the FTSE 100 leader board amid speculation from Nomura over a potential merger between Xstrata and Anglo American.

The rumours saw the duo rise 34.5p to 684p and 88p to 1777p respectively.

Lonmin was the top blue-chip performer with a gain of 111p to 1428p or eight per cent, helped by buoyant metal prices.

Oil companies BP and Royal Dutch Shell rose 2.75p to 511p and 14p to 1675p respectively, although prospector Tullow Oil fell after a disappointing drilling update from Uganda. It dropped 29p to 990p.

Airline British Airways was another faller, down 1.3p to 155.5p on the higher oil price and downbeat comments from ratings agency Moody’s.

Utility group Severn Trent lost ground after annual profits suffered due to rising bad debts and falling commercial water usage. Severn slid 20p to 1120p, or two per cent.

Nationwide’s house price data lifted housebuilders, with Taylor Wimpey up 2.75p at 32p, Persimmon was 18.5p stronger at 364p, and Redrow 5.75p higher at 195.75p. But Barratt bucked the trend with a 4p fall to end at 158.5p.

One of the biggest FTSE fallers was Fresnillo, down 30p at 672p.