FTSE enjoys strong start

The FTSE 100 Index surged ahead today as traders were buoyed by news of a multi-billion plan to boost the Chinese economy.

The $586bn (€455bn) spending package – a mix of spending, subsidies and tax cuts aimed at fending off a slowdown – was a shot in the arm for the FTSE’s heavyweight mining stocks.

Strong gains for Asian markets overnight kick-started a strong beginning to the week in London, with the FTSE adding 152.5 points to 4517.4 by mid-morning.

Anglo American led the way as mining shares dominated the risers board. The firm was up a mammoth 18% or 237p to 1587p, closely followed by Xstrata, up 173p to 1241p.

In all, eight commodity stocks were showing double-digit gains including oil and gas services firm Wood Group, up 26.5p to 243.5p as crude oil ticked up to 64 dollars a barrel.

British Airways continued to progress, up 8% or 12.3p to 158.3p, after the company’s well-received half-year results on Friday.

Banks were the only major fallers after HSBC said pre-tax profits were below last year in the first nine months of the year. Despite the wider market gains it was unchanged at 746.5p as the bank also saw a sharp rise in US bad debt provisions.

Asian-facing Standard Chartered was the biggest banking casualty, down 30.5p to 909.5p, or 3% after HSBC said it had seen signs of a slowdown in the region’s rapid growth.

Royal Bank of Scotland was another faller, off 16p to 62.4p. HBOS proved the exception, rising 6.4p to 110.7p, after the former heads of Royal Bank of Scotland and Bank of Scotland announced their interest in creating an alternative to the current Lloyds TSB takeover.

In the second tier, Country Life butter firm Dairy Crest slumped 26% or 86p to 244p after it warned annual profits would be 10% down on last year due to higher milk costs and the economic slump.