Footsie kicks off 09 with a bang

The FTSE 100 Index joined stock markets globally in kicking off 2009 with a bang today in spite of more gloomy economic data.

London’s Footsie soared 2.9% – up 127.6 points at 4561.8 – as oil and commodity stocks provided a new year boost after the index closed 2008 with the worst annual performance on record.

Indices across Europe also started the new year on a brighter note, while the Dow Jones Industrial Average rose 1.6% in early trade.

But the positive start came amid thin trading and experts were sceptical over how long stocks could maintain the rally in the face of an increasingly bleak economic outlook.

The signs already look far from promising after a Bank of England survey showed lenders expect a further deterioration in credit conditions. The Bank also said the number of mortgages approved for house purchase slumped to a new record low during November.

And the Halifax reported a record 16.2% drop in house prices for 2008 and said the property market would come under further pressure this year.

Among stocks shaking off downbeat data were commodity blue chips, with oil prices in sharp focus after a volatile start to the year because of Russia and Ukraine’s dispute over natural gas payments.

New York-listed oil prices edged back up to more than $44 a barrel amid disruption fears

due to conflict in the Middle East.

BP shares were more than 5% higher, up 26.75p at 552.75p, while Royal Dutch Shell added 95p to 1821p – a rise of 6%.

Market talk also suggested the increasingly weak economic outlook would provide some safe-haven buying in gold, which helped lift commodities.

Gold miner Randgold Resources extended its 60% rise during 2008 into the new year, with a 115p hike to 3063p.

Xstrata was top of the risers board, ahead by 107.5p at 747.5p, while fellow mining stock Rio Tinto gained 204p to 1694p.

Banks were also on the front foot after a dismal 2008. Royal Bank of Scotland led the way with a gain of 3.1p to 52.5p, while HBOS gained 3.5p to 72.5p despite the pressure of a potential legal obstacle to its tie-up with Lloyds TSB posed by the trustees of the HBOS pension scheme.

Elsewhere, struggling sportswear retail chain JJB Sports saw shares soar 29% after it announced a management reshuffle to boost its boardroom line-up.

Recently-knighted former Next boss David Jones has been promoted from deputy chairman to chairman, while JJB has also hired the ex-chief executive of Selfridges to oversee strategy. Its shares rose 1.17p to 5.26p.

The four biggest Footsie risers were Xstrata ahead by 107.5p to 747.5p, Rio Tinto up 204p to 1694p, Vedanta Resources up 82p at 693.5p and Antofagasta up 46p to 471.5p.

The biggest Footsie fallers were Inmarsat down 17.5p to 454p, FirstGroup off 14p to 420p, Amlin down 6.75p to 350.75p and Cobham down 3.25p to 202.25p.