Bernanke comments help spur FTSE rally

The FTSE 100 Index broke new ground for the year after encouraging comments from US Federal Reserve chairman Ben Bernanke lifted markets worldwide.

Mr Bernanke’s view that recession was “very likely over” combined with robust economic data to help Wall Street close at a new high for 2009.

With US markets set to open on the front foot later today, the FTSE 100 Index climbed another 67 points to 5109.2 by mid-morning.

Today’s rally came despite more gloomy news from the labour market after a rise in the jobless rate to 7.9% in the three months to July.

Next shares jumped 4% as it upgraded its annual profit forecast for the third time in five months and posted a 6.9% hike in half-year earnings.

The interim results from Next, which climbed 75p to 1774p, were good news for a number of other retailers as Argos owner Home Retail Group lifted 10.5p to 293.6p and blue-chip newcomer Burberry added 8.9p to 470.2p.

Commodity stocks also enjoyed a strong session amid economic recovery hopes, with miner Xstrata up 39p to 986p and Lonmin ahead 77p to 1826p.

Tullow Oil topped the Footsie risers board, up 5% or 60p to 1147p, after the Financial Times said the company and its US partner had established a new oil frontier along the coast from Ghana to Sierra Leone.

The stock was the subject of takeover speculation involving Italy’s Eni yesterday, but analysts said the cost of any acquisition had gone up today.

Outside the top flight, mining company UK Coal fell 8.5p to 111.75p after it announced plans to offer new shares in a £100m (€112m) fundraising.

The UK’s biggest coal miner said the proceeds would be used to pay down debt and provide it with headroom to carry out a major investment programme.