FTSE rise aided by banks

FTSE 100 opened on the front foot this morning as the tech sector was given a boost by stellar sales from Apple in the US while banks also nudged up.

But UK GDP figures showing that the country had plunged back into recession cast a shadow.The UK economy shrank by 0.2 per cent in the first three months of 2012, the Office for National Statistics (ONS) said.

That makes the second consecutive quarter in which the economy has contracted which represents a recession.

Investors were also eyeing a Federal Reserve meeting today for signs that more liquidity is to be pumped into the world’s biggest economy in a bid to keep the country’s economy on track.

Banks provided the biggest boost for the blue chips in London, with Barclays up two per cent ahead of its first-quarter results due tomorrow, the first of the domestic sector's reporting season.

Lloyds nudged up by 1.9 per cent with RBS up the same level.

In Europe investors were digesting results from Credit Suisse, which reported a drop in profit in its first quarter.

ARM Holdings was the top FTSE 100 gainer, up three per cent, bouncing back after investors reacted negatively to in-line results from the British chipmaker yesterday.

But forecast-beating numbers released overnight by US technology giant Apple fuelled today’s gains as ARM-designed chips are used in the US firm's iPhone.

Jefferies upgraded its rating for ARM to "hold" from "underperform".

Vedanta was the best performer among miners, up 2.8 per cent.

Engineer IMI continued to make progress with a two per cent rise after issuing an upbeat trading statement last week.

British Gas owner Centrica was the heaviest faller in early trading, down 3.6 per cent, after going ex dividend and so losing its payout attraction.

Publisher Reed Elsevier was off by a similar level and Tesco was down by 2.4 per cent. The pair also went ex dividend, which hit their stock.

Other stocks edging down were Rolls Royce, 0.7 per cent, and Associated British Foods, 0.7 per cent.

On the FTSE all-share Premier Foods, which has brands including Hovis and Mr Kipling, put on three per cent after announcing a sales lift.

In Asia the Nikkei closed up 0.9 per cent and the Hang Seng down 0.1 per cent.