FTSE rises on strong financials

BRITAIN’S top share index closed higher yesterday, boosted by commodity stocks and banks which bounced back after hefty falls earlier in the week, as investors welcomed economic data from both the UK and the United States.

The FTSE 100 ended up 75.82 points, or 1.4 per cent, at 5,657.10, having hit a seven-week low earlier in the session.

Energy stocks were in demand, following crude prices higher after a US government report showing crude oil stockpiles rose against expectations last week, but by less than reported by industry.

It was a similar story with mining stocks, with Antofagasta, Xstrata and Kazakhmys near the top of the blue-chip leader board – up 4.3 per cent and 4.2 per cent respectively -- boosted by rising metals prices.

“I think [the market’s] being helped by the GDP numbers for the UK coming in flat ... and also US figures, they came in well, certainly the initial jobless claims,” Manoj Ladwa, senior trader at ETX Capital, said.

“But we’re going into a US holiday for Thanksgiving tomorrow and volumes are relatively light ... so we could give back some of these gains tomorrow,” he said.

Britain’s economy grew 0.8 per cent in the third quarter of this year, official data confirmed, while US jobless claims fell more than expected, the government reported.

Risk-sensitive banks staged a recovery, with Standard Chartered the best off, adding 1.9 per cent.

Traders said investor sentiment was helped as worries eased over tensions in the Korean peninsula.

North Korea shelled a South Korean island on Tuesday in one of the most serious incidents on the peninsula since the Korean War ended in 1953.

The US State Department said yesterday it believed the artillery attack was an isolated action and not part of a wider campaign by Pyongyang.

Among individual movers, Compass Group grabbed the top spot among FTSE 100 gainers, putting on 7.3 per cent, after the contract caterer beat profit forecasts and raised its dividend by a third. It said contract wins helped its second half core sales to end-September rise nearly six per cent, after a flat first half.

Positive broker sentiment helped testing equipment firm Intertek and outsourcer Capita Group, up 5.5 per cent and 3.1 per cent respectively, with Goldman Sachs adding both to its “conviction buy” list in a sector review. Johnson Matthey added two per cent after forecast-beating results from the platinum refiner.

Autonomy was the sharpest faller, off 5.9 per cent, after the software firm said it has been working on an acquisition over the past few months.

Capital Shopping Centres was also on the back foot, down 5.1 per cent after confirming it is in talks to buy the Trafford shopping centre in Manchester for £1.6bn in a deal that would make the seller, Peel Group, its biggest shareholder.