Hope of global economic recovery spur FTSE on

The FTSE 100 Index edged closer to the 4500 barrier today as stocks were spurred on by overnight advances on hopes of a global economic recovery.

Miners benefited the most from the economic optimism, seen after news of an expansion in Chinese manufacturing, while a US government rescue deal was also expected for General Motors, due to file for bankruptcy protection later today.

Overnight gains across Asia helped boost early trading sentiment on the FTSE, which stood 72.3 points – 1.6% – higher at 4490.2 by mid-morning.

Stock markets across Europe likewise surged amid the general investor cheer, with the Cac 40 in France up 2.4% and Germany’s Dax moving 3.2% higher.

Reports suggested the US government was planning to take a 60% stake in GM under a deal to provide an additional £19bn (€21.8bn) in aid to help it emerge from bankruptcy.

But with little corporate news to move the London market, mining stocks led the way on a rise in metal prices, with both copper and nickel hitting new 2009 highs.

Vedanta Resources topped the risers board with a gain of 130p to 1711p. This was closely followed by Antofagasta – up 49.5p at 678.5p – and Rio Tinto, up 188p at 2988p.

Insurers also bounced back as the wider market rallied, led by Aviva with a 25.25p hike to 359.75p.

Thomson and First Choice parent TUI travel joined them on the risers board, ahead 6% or 14.5p to 262.75p after a broker upgrade from Charles Stanley.

Elsewhere cake and bakery firm Finsbury Food lifted 9% after it confirmed an early-stage takeover approach, but warned of “considerable doubt” over any firm offer.

Despite losing an earlier 23% shares gain, the stock still stood 2p higher at 23.5p.