Miners fell sharply this morning on news the Australian government plans to introduce a new 40% tax on resource projects from July 2012.
However, the UK's blue chip index managed to survive the hit to miners and a turbulent weekend for Europe following the agreement of a £95bn bail-out plan for Greece. The FTSE 100 rose 0.23% or 12.65 points to 5540.64 in early trading.
The news from Australia immediately took its toll on Rio Tinto down 4.41% to £32.30, while BHP Billiton fell 3.41% to $1956 and Randgold Resources declined 2.24% to £54.60.
BP also suffered losses, down 4.34% to 550.5p, on concern over the costs of litigation and compensation for the oil spill in the Gulf of Mexico.
The tax changes pose a long term threat as mining companies comprise 14% of the FTSE 100 index with BHP Billiton and Rio Tinto alone accounting for 7.5%. Both these mining giants have extensive operations in Australia, meaning they will bear the full brunt of a new levy.
Market risers this morning included Inmarsat, up 6.29% to 811.5p, 3i Group which grew 2.79% to 279.9p and Smiths Group, rising 2.75% to £11.58.
Elsewhere, Prudential edged up 0.09% to 580p, as it prepares for tomorrow's record £14bn rights issue.
On Wall Street, the Dow Jones rose 1.3% or 143.22 points to 11,151.83 powered by news of the merger between United and Continental Airlines to create the world's biggest carrier.
The deal also helped the S&P 500 reach a two-month high, it closed up 1.31% or 5.57 points to 1,202.26.
Transport stocks had their best day in six months thanks to the airline merger and an industry report saying the US manufacturing sector grew in April at its fastest pace in almost six years.
United Airlines gained 2.37% to $22.11, while Continental Airlines rose 2.28% to $22.86. Meanwhile, The Boeing Co advanced 2.71% to $74.39.
In Japan, the Nikkei climbed 1.21% or 132.61 points to 11,057.4 as news of the Greek bail-out eased investors' fears.
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