THE FTSE 100 continued its strong climb, rising 149.4 points to 6029.2 – an increase of 2.54%.

Feb 2 2008 by Graeme King, The Journal

Rio Tinto was the strongest climber and closed 12.99% up – an increase of 644p to 5599p.

The catalyst for growth was an acquisition of a 12% stake in the company by the alliance of Chinese state-owned mining group Chinalco and aluminium producer Alcoa.

The acquisition, valued at $14bn, represents the biggest overseas investment by a Chinese company and represents a major stumbling block to BHP Billiton's proposed takeover.

Current speculation suggests that the move was a bid to block the mining tie-up which Chinese companies have long opposed due to the steel monopoly that would be established.

On the possible collapse of the deal BHP Billiton shares jumped 145p to 1623p. Shares in other mining firms Vedanta and Antofagasta also climbed 160p to 1957p and 47.5p to 700.5p respectively.

The biggest loser on the day was British Airways which fell 14p to 318.25p, following concerns over the impact of rising fuel costs. It was joined by medical supplies producer Smith & Nephew – down 26.5p at 655.5p, and also Marks & Spencer which slumped 9.5p to 434.75p.

Michelle Stansby Investment Manager Barclays Wealth