The FTSE 100 climbed back above the 6,700 level for the first time since June, spurred by mining stocks after overnight gains in commodity prices.

The rise comes two months after the credit crunch caused the index to fall to a year-low of 5,858.9. The FTSE 100 was 91.5 points higher at 6,724.5. The benchmark was just shy of its previous seven-year high of 6,732.4 set on June 15. The broader indices all closed higher with the FTSE 250 finishing up 110.8 points at 11,622.9.

Rumours of possible consolidation also helped the mining sector. Vedanta Resources was the biggest gainer, rising 127p to £23.17, Antofagasta gained 35p to 871.5p, Xstrata rose 137p to £35.92 and Rio Tinto was up 155p to £45.63. Kazakhmys was up 65p at £15.89. Brokers yesterday cited possible consolidation in the sector.

Oil stocks followed suit, with Tullow Oil up 28p to 626½p and BG Group up 40p to 883p. BP gained 13½p as investors welcomed plans for restructuring to streamline its complex organisation.

Vodafone was yesterday’s second-biggest riser, with the shares up 8½p to 179½p. The boost followed rumours that Arun Sarin, the chief executive, was close to leaving the mobile operator.

Schroders, the fund manager, was a top FTSE 100 riser, up 60p to £15.60, extending yesterday’s gains amid fresh rumours that the firm could sell its investment arm to focus on private banking, or sell several of its low- margin businesses instead.

Resolution, the insurer, added 12p to 692p after disclosing yesterday that it has rejected a 660p-a-share cash proposal from Pearl Assurance.

On the downside, Northern Rock was down 15½p to 258p, after two days leading the FTSE 100 gainers. Deutsche Bank cut Rock’s target price to 225p from 370p. The broker maintained its “sell” rating on the bank.

Housebuilders were also weak, reflecting the news from the RICS survey and recent sector downgrades by UBS. Among the blue chips, Taylor Wimpey lost 13p to 290¾p, Barratt Developments lost 26½p to 722p, with Persimmon down 42p to £10.03.

Sage was down 8½p to 243¼, after a trading statement revealing disappointing organic growth at its US business that prompted the departure of two members of its US management team. Sage said that it expected full-year revenues to be in line with market consensus forecasts of £1.158 billion.

Home Retail Group fell 12¾p to 388p after it acquire 27 properties from Focus DIY. Nick Bubb, retail analyst for Pali, said that although the acquisition is a “small positive” for Home Retail, the company’s home improvement and garden unit, Homebase “has been a disappointing acquisition since 2002 and increasing its exposure to to the DIY market ahead of the housing market downturn may not turn out to be too smart”.

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New York: Stocks retreated from lofty heights after a European Central Bank official noted rising price risks and JPMorgan Chase cut its sales forecast for Baidu.com, the Chinese internet group. The news led traders to take profits, particularly in technology stocks, from big gains achieved earlier in the day. The Dow Jones industrial average fell from record levels reached when Wal-Mart lifted its profit forecast, and closed 63.60 off at 14,015.10.

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