UK stocks : FTSE 100 gains 0.5 pct after early falls
"We believe today's announcement could significantly realign Rio Tinto with shareholder interests through reduced M&A and reduced capex spend."
The FTSE 100 closed up 28.38 points, or 0.5 percent, at 6,132.36, its highest close since May 2008.
Few investors are expected to roll over their downside protection at tomorrow's options expiry, with 60 percent more puts than calls due to expire on the FTSE 100.
While this leaves the market vulnerable to a correction, few investors are willing to spend money on downside insurance on an index that has gained nearly 4 percent this year and has left 98.2 percent of put options worthless.
With so few people prepared to bet on the market falling, weakness such as that exhibited this morning is an opportunity to get into a rising market at slightly more affordable levels, said Robert Quinn, chief European equity strategist at Standard & Poor's Capital IQ.
"I think that if the market comes off a little, it's a nice buying opportunity," he said.
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