People walk through the lobby of the London Stock Exchange in London
By Kit Rees and Atul Prakash
LONDON (Reuters) - FTSE gained ground on Thursday, with a rally in basic resources stocks on the back of stronger metals prices supporting the broader market.
The UK mining index <.FTNMX1770> rose 1.4 percent, the top sectoral gainer, after nickel prices rose sharply on supply concerns. Prices of other industrial metals such as copper and aluminium also strengthened.
Shares in Anglo American , Glencore , Fresnillo and Antofagasta rose 3.8 percent to 5.9 percent, helping the blue-chip FTSE 100 index <.FTSE> close up 0.9 percent to 6,391.13 points.
"A lack of major market moving news and below average trading volume due to U.S. markets being closed for Thanksgiving today is favouring higher shares ... the overall trend is clearly pointed to the upside," Markus Huber, senior analyst at Peregrine & Black, said.
However, BHP Billiton underperformed the market. Its shares fell 2.4 percent, the top decliner in the FTSE 100, following bearish comments from JP Morgan and Societe Generale.
JP Morgan cut its rating on the stock to “underweight” from “neutral” and said it was now factoring in a 50 percent reduction in its dividend due to a further downside risk to copper prices.
"We believe the Samarco tailings dam failure will prove to be the straw that breaks the camel's back on BHP's progressive dividend,” JP Morgan analysts said, referring to the bursting of the dam at Brazilian miner Samarco, an iron ore joint venture between Vale SA and BHP Billiton, earlier this month.
Societe Generale also cut its target price for the stock to 915 pence from 1,050 pence.
The UK mining index has slumped more than 40 percent this year on concerns about metals demand in top consumer China and a firmer dollar, putting pressure on metals prices.
National Grid and SABMiller fell 1.5 percent and 0.2 percent respectively as their shares traded without the entitlement of their latest dividend payouts.
Among mid-cap companies, Paypoint slumped 6.9 percent after it reported a 5 percent fall in its operating profits in the April-September period.
(Reporting by Atul Prakash; Editing by Alison Williams)