FTSE close: Footsie shrugs off economic gloom

 

A shock fall in UK output during the third quarter of 2009 did little to quell the advance of the London market today.

London Stock exchange

The FTSE 100 index actually reached a new 13-month high near 5300 at one stage before giving back some of the gains to close 35.2 points ahead at 5242.7.

Despite the 0.4% decline in GDP, markets were focused on strong quarterly trading figures from bellwethers of consumer demand, such as Amazon, in the US.

IG Index's Anthony Grech said: 'With today's surprise announcement suggesting that interest rates are likely to remain suppressed for some time to come, investors still seem happy to take the bet that shares are still going to offer amongst the best returns.'

The real impact of the figures came in the foreign exchange markets, as the pound lost ground against the euro and the dollar with a extension of the Bank of England's £175bn quantitative easing programme becoming more likely. The pound dropped below 1.09 euros and slid more to 1.63 against the dollar.
›› Read more on the GDP shock.

Lloyds Banking Group was higher as the figures appeared to revive speculation over its likely participation in the Government's asset protection scheme, limiting the amount of cash to be raised from shareholders.

Shares in the part-nationalised bank were up more than 1% or 1.43p to 96.23p, while Royal Bank of Scotland added 1.57p to 47.17p - almost 4%.

Miners drove the market's latest rally with Vedanta Resources up 72p at 2358p and Kazakhmys 42p higher at 1294p.

Another healthy set of weekly trading figures from John Lewis Partnership lifted retail stocks, with Next ahead 33p at 1870p and Argos owner Home Retail Group 4p stronger at 305.6p.

Elsewhere in the consumer sector, Unilever shares were 25p higher at 1866p and cruise ship operator Carnival lifted 21p to 2082p.

Insurance firms were also in favour after Aviva added 2.1p to 431.2p and Prudential topped the risers board with a gain of 31p to 633.5p.

In a quiet session for corporate news, shares in BSkyB were in positive territory early on after it reported a 40% leap in first quarter profits and said net customer additions were better-than-expected at 94,000 in the three months to September 30.

Shares were 2% higher at one stage before the gains faded to leave the satellite broadcaster 6.5p off at 553p.

Outside the top flight, doorstep lender Provident Financial held steady after it forecast further profits growth this year and said it had weathered the recession because of its cautious lending policies.

However, the Bradford-based lender said any pick-up in activity was unlikely until the spring at the earliest. Shares were down 9p to 951p.

The biggest Footsie risers were Prudential up 31p at 633.5p, Autonomy ahead 63p at 1444p, Anglo American up 95p at 2380p and Xstrata up 36p at 1012p.

The biggest Footsie fallers were BT down 4.4p at 135.3p, Bunzl off 13p at 651.5p, 3i down 5.6p at 296.3p and Cable & Wireless off 2.6p at 141p.