FTSE clings to early gains

The FTSE 100 Index hung on to early gains today despite more gloomy data on the UK economy.

Official figures showed the economy contracting by 0.6% during the third quarter of the year – bigger than the 0.5% decline first thought and the worst for 18 years.

But the Footsie added 35.1 to 4284.3 by mid-morning as mining stocks lent their support in the last full trading session of the week.

Xstrata was the leading top-flight riser – up 8.5p to 212.5p, or 4%. Sector peers such as Rio Tinto and Antofagasta also made gains, up 42p to 1397p and 13p to 420.75p respectively.

With corporate news thin on the ground, defence giant BAE Systems was also a strong gainer after brokers at Goldman Sachs reiterated their buy rating on the stock, pushing shares 13p up to 355.5p.

Engines firm Roll-Royce meanwhile cheered 8.25p to 322.5p after a major order from Etihad Airways of the United Arab Emirates.

Elsewhere in the top flight Argos owner Home Retail Group, bounced back after a difficult return to the FTSE 100 yesterday.

The stock – hit by a 15% fall amid concerns over Christmas trading yesterday - but today the stock was clawing back losses, ahead 8.75p at 212.75p.

On the flip side, retail concerns continued to weigh on Marks & Spencer and Next. M&S fell 0.75p to 220p, while Next dropped 16p to 1082p.

And banking giant HSBC was on the back foot again as rumours of a fundraising continued to swirl in the markets. The bank was 9p down at 603.25, while HBOS shed 0.1p to 65p.

Elsewhere housebuilder Taylor Wimpey added 0.13p to 14.88p after it said an agreement over delaying a test of its banking covenants was likely before the end of the year.