* FTSE 100 up 0.5 pct at close
* Glencore (Xetra: A1JAGV – news) surges as brokers applaud plan to cut debt
* Other miners rally, with copper firm after China holidays
* Pearson (Xetra: 858266 – news) is top media gainer on upgrades
* AB Foods falls after earnings update (Updates closing prices)
By Kit Rees and Alistair Smout
LONDON, Sept 7 (Reuters) – Britain’s top share index rose on Monday, led into positive territory by Glencore after the mining and commodities trading firm announced a plan to cut billions of dollars in debt in the face of weakening metals prices.
Glencore rose 7 percent after it said it will suspend dividends, sell assets and raise $ 2.5 billion in a new share issue as it aims to cut its debt by a third to $ 20 billion by the end of next year.
It (Other OTC: ITGL – news) also plans to shut down loss-making mines to help reduce a glut of supply that has weighed on prices.
Glencore’s share price has suffered, hitting an all-time low in the previous session, as the price of copper and coal has slid to more than six-year lows, but brokers welcomed the move to cut debt and production.
“There has been plenty of broker support for Glencore today, so generally miners are … probably in a slightly better place unless the market takes another tumble,” said Zeg Choudhry, managing director of LONTRAD.
Glencore was upgraded to “neutral” from “underperform” by Bank of America (Swiss: BAC.SW – news) /Merill Lynch following the plan’s announcement.
Other miners also rallied, with Antofagasta (Other OTC: ANFGF – news) up 7.5 percent and Anglo American (LSE: AAL.L – news) up 1.4 percent.
In all, the mining sector rose 2.1 percent, with the price of copper supported as China’s top state planner said that some key economic indicators were improving.
Traders were wary ahead of a deluge of Chinese economic data following a two-day market holiday at the end of last week, with a U.S (Other OTC: UBGXF – news) . holiday on Monday keeping volumes low.
The British FTSE 100 was up 31.60 points, or 0.5 percent, at 6,074.52 points at the close, rallying after a 2.4 percent fall on Friday.
British publisher Pearson was up 3 percent after two brokerages upgraded the stock, making it the top gainer on the E300 media index.
The FTSE’s top faller was Standard Chartered (HKSE: 2888.HK – news) , down 1.7 percent, trading at 6-year lows after the Sunday Times reported over the weekend that the bank could be the focus of new Iran-related fines.
Associated British Foods (LSE: ABF.L – news) , the company behind budget retailer Primark, dropped 0.8 percent after a corporate update.
Although it maintained its full-year earnings forecast on Monday, as progress at Primark helped to offset declines in its sugar unit, it said the strengthening pound would hit its results by more than previously expected. (Editing by Ruth Pitchford)
