Market Update: Miners continue to lead markets higher

Firmer commodity prices continue to spur miners higher amid growing optimism for the global economic recovery, but overall caution prevails ahead of Britain's Office for Budget Responsibility's growth and borrowing forecasts later today, which will form the basis for next week's Budget.

Suggestions from Bank of England policymaker Andrew Sentance that interest rates may have to rise to curb inflation has given a boost to sterling.

By 10am the FTSE 100 index was holding on to a rise of 42 points at 5,206 and the Mid-250 index was 103 points higher at 9,765

Top five gainers were Fresnillo at £10.47, Kazakhmys £11.69, Anglo American £26.47, ENRC £10.54 and Vedanta Resources £22.72, between 2.5% and 3.7% higher.

Favourable press comment and a recent series of positive presentations in America boosted Intercontinental Hotels 26p to £11.81 and an encouraging weekend press article prompted support for Smiths Group, 25p higher at £10.92.

Other leaders to attract investment interest included British Airways at 204p, Old Mutual 111.2p, Autonomy £19.40, Investec 493p and Prudential 545.5p, up 2.03p to 10.5p.

Dividend uncertainties and the proposition of a ring-fenced oil spill damages fund continued to weigh on BP, 14p easier at 379p.

Other energy stocks were easier in sympathy with BG Group off 9p at £10.89, but Nautical Petroleum attracted speculative interest at 145p, up 17.5p.

The buoyant order book and upbeat trading statement boosted Weir Group 92.5p to £10.43 and Pennon Group rose 12p to 551p, helped by an RBS rating upgrade.

Brit Insurance gave back 7p to 872p on the absence of further bid developments