FTSE rallies in early trading

Banks and retail stocks extended gains today as their post-interest rate cut rebound continued unabated.

Lloyds Banking Group and Royal Bank of Scotland rose 6% higher, while retailers also made strong progress, with Currys and PC World parent DSG International soaring 17%.

The wider FTSE 100 Index added 30.1 points to 4259.1 in mid-morning trade, with British Airways also helping add support.

BA shares rose 3%, with the market relieved there was no further bad news in today’s third quarter update following its shock profit warning last week.

The Footsie had also started on the front foot today after a positive overnight finish on Wall Street gave blue chips a boost.

BA’s hike saw it earn a place as one of the top share risers, ahead 3.9p at 131.5p, despite revealing pre-tax losses of £70 million in the first nine months of the year.

Investors were already braced for losses after last week’s profits alert and were cheered today by assurances BA’s merger talks with Spanish rival Iberia were still on track.

RBS and Lloyds were also making strong gains as the banking sector extended yesterday’s rebound following the half point cut in interest rates to 1%.

News of a boardroom shake-up at RBS and a positive note on the sector from broker Credit Suisse added to the upbeat sentiment.

RBS rose 1.4p to 23.4p, while Lloyds increased 6p to 106.6.

Argos-owner Home Retail Group was among the blue chip retailers seeing gains, ahead 6% or 12.75p to 220p.

But second tier group DSG International saw the biggest shares leap as it raced ahead by 3.75p to 26.25p.

GlaxoSmithKline was near the top of the fallers board as it lost some of yesterday’s gains after news of a ramped up cost cutting programme. Shares today slipped 26p to 1251p.

And in the FTSE 250, online gaming firm PartyGaming was also in the red, down 2.5p at 167.25p, after an update revealed takings fell.