By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- Commodity shares buoyed the British market on Friday, with bid speculation and changes to Australia's controversial proposed mining tax helping the sector.
In the mining sector, BHP Billiton (UK:BLT 1,743, +48.50, +2.86%) (BHP 63.37, +0.95, +1.52%) rose 1.6%, Rio Tinto (UK:RIO 2,992, +87.50, +3.01%) (RTP 45.43, +1.17, +2.64%) shares climbed 1.1% and Xstrata (UK:XTA 894.50, +48.70, +5.76%) shares were up 3.2%.
The sector has been in the news lately after the Australian government proposed a 40% tax on mining profits.
However, on Friday the government changed its tax proposal, which was partly responsible for pushing the nation's prime minister out of office last month.
Under the new terms, the headline tax rate will be reduced to 30% for coal and iron-ore earnings. Read more on tax proposal.
Gains from miners helped the U.K. FTSE 100 index (UK:UKX 4,850, +44.43, +0.93%) to rise 0.6%, or 27.89 points, to 4,833.66.
"The FTSE 100 has been lifted by around 20 points so far today with a lot of the gains coming from the mining sector," said Anthony Grech, head of research at IG Index. "[Gains are] still relatively modest, reflecting the bigger concerns investors still have about worldwide recovery," he added.
Other European shares edged off five-and-a-half week lows with gains small ahead of key U.S. jobs data. See Europe Markets.
Payrolls are expected to drop by 130,000 in June after recent readings were boosted by temporary census hiring. Read U.S. jobs preview.
Oil and gas firms were also on the move in the top U.K. index, with Tullow Oil (UK:TLW 1,037, +45.50, +4.59%) shares up 4.3% and Cairn Energy (UK:CNE 420.50, +19.20, +4.78%) shares up 4.8%.
The sector came into focus after Dana Petroleum (UK:DNX 1,392, +215.00, +18.27%) soared 18.7% to 1,397 pence outside the top index.
Dana said late Thursday that it has received a preliminary bid approach which "may or may not lead to an offer for the company." South Korean oil firm KNOC is reportedly mulling a bid for the firm.
Staying outside the top index, shares of building materials supply firm Travis Perkins (UK:TPK 749.00, +40.00, +5.64%) climbed 5.2%.
It now expects to report first-half results ahead of management expectations after revenue for the six months to June 30 rose 4.7% and comparable sales climbed 3.4%.
"Given our pleasing trading performance in the first half, we now anticipate recommencing the payment of dividends," said the firm which intends to pay an interim dividend of 5 pence per share.
In broker action, shares of insurance group Amlin (UK:AML 394.70, +13.20, +3.46%) rose 2.7% after it was upgraded to buy from hold at Citigroup.
While the share price of the company has had a strong performance relative to the broader market, it fails to capture the strategic progress and continued value creation at Amlin, the broker said.
