Strong US opening fuels FTSE gains

Strong US opening fuels FTSE gains

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The FTSE 100 Index rose by 52.1 points to 5920.1

A strong opening on Wall Street fuelled gains on London’s leading share index as banks and miners raced ahead.

Quarterly profits from US giant General Electric were well received on the Dow Jones Industrial Average, up nearly 80 points in early trade as the cheer offset a loss from the country’s largest bank, Bank of America.

Investors in London shrugged off lingering concerns about a Chinese interest rate rise and eurozone debt exposure in the financial sector, with the FTSE 100 Index up 52.1 points to 5920.1.

Economists are expecting an interest rate hike in China as the country battles with stubbornly-high inflation – a move that would choke Chinese demand for commodities.

This has hit resources stocks in recent days, while a weaker-than-expected show from American banks and the eurozone worries have held back financials.

But these concerns eased, with Royal Bank of Scotland top of the risers board after reports it was in talks with the Treasury to secure an early exit from the government asset protection scheme. Shares were up 2.9p at 45.1p, or 7%.

Other banks moved higher in light of JP Morgan’s 80% jump in fourth-quarter profits on Thursday, with little reaction to results from BoA showing a 1.6 billion US dollar (£1 billion) loss in the fourth quarter. Lloyds lifted 1.1p at 67.9p and Barclays moved 2.2p ahead to 304.5p.

Miners were also boosted by marginally improved metal prices, with Anglo-Swiss group Xstrata up 36.5p at 1425p and platinum miner Lonmin ahead 41p at 1785p.

Investors brushed off official figures from the Office for National Statistics, which revealed retail sales volumes declined 0.8% last month – the worst December on record.

Blue-chip retailers saw gains despite the report, with B&Q owner Kingfisher up 5.7p at 269.9p, Marks & Spencer ahead 2.6p at 369.5p and Primark owner Associated British Foods adding 19p to 1098p. Outside the top flight, shares in outsourcer Mouchel jumped 22% or 24p to 137.8p after construction firm Costain revealed a third takeover proposal worth more than £170 million. Mouchel said it was also considering other approaches it had received since early December.

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