Large cap index back on the up as sentiment stays high

THE FTSE 100 closed up by 1 per cent yesterday, as investors took their positions ahead of last night&rsquo;s Federal Reserve statement on US growth prospects.<br /><br />The index ended 45.42 points higher at 4,716.76, after closing down 1.1 per cent on Tuesday, its biggest fall in a fortnight after hitting 2009 highs on Friday.<br /><br />&ldquo;Great, great turnaround. There&rsquo;s been a switch over in sectors, largely down to Wall Street," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities.<br /><br />&ldquo;With newsflow getting better, the market doesn&rsquo;t want to come back very far. We&rsquo;re at 4,700 wanting to move upwards, not at 4,700 wanting to move downwards.&rdquo;<br /><br />Banks were among the top blue-chip risers, rebounding after falls earlier in the session, as investors&rsquo; attention shifted away from ongoing fears of potential cash calls in the sector to positive noises from the UK inflation report.<br /><br /><strong>Royal Bank of Scotland, Standard Chartered</strong> and <strong>Barclays</strong> added 0.2 to 5.4 per cent. <strong>Lloyds Banking Group</strong>, which fell earlier in the week following media reports that it was considering a multi-billion-pound share offer, rose 6.5 per cent after it said it would sell the bulk of its Insight Investment unit to Bank of New York Mellon.<br /><br /><strong>BG Group</strong> climbed 4.9 per cent, supported by an ING upgrade to &ldquo;hold&rdquo; on valuation grounds, while <strong>Royal Dutch Shell</strong> gained 1.5 per cent, and <strong>Tullow Oil</strong> and <strong>Cairn Energy</strong> up 2.5 and 2.1 per cent respectively.<br /><br /><strong>Antofagasta</strong> and <strong>Lonmin</strong> rose 1.5 per cent and 3.1 per cent respectively, while <strong>Rio Tinto, Randgold Resources</strong> and <strong>Xstrata</strong> gained 0.3 to 2.8 per cent.<br /><br /><strong>BHP Billiton</strong> gave a cautiously optimistic outlook for commodities demand yesterday after posting a 51 per cent dive in second-half profit, its first profit fall in seven years. Its shares rose 1.8 per cent.<br /><br />Construction and engineering group <strong>Balfour Beatty</strong> was the top blue chip performer, up 6.6 per cent after it said its underlying first-half pre-tax profit rose by 14 per cent.<br /><br />Among the fallers, Diageo handed back some of the previous sessions gains, down 0.2 per cent, along with fellow drinks maker SABMiller, off 0.5 per cent<br /><br /><strong>TUI Travel</strong> shed 2.9 per cent as warnings over its winter bookings overshadowed strong third-quarter numbers.<br /><br /><strong>BP, Pennon, RSA Insurance, Schroders</strong> and <strong>Standard Life</strong> all fell after trading ex-dividend.