FTSE powers toward new high

The London market powered towards a new 13-month high today, despite shock figures showing the UK remained in recession in the third quarter of 2009.

The FTSE 100 Index matched strong gains for markets elsewhere after strong quarterly trading figures from bellwethers of consumer demand, such as Amazon and South Korea’s Kia Motors, ensured the global economic recovery fears that disrupted trading on Thursday were largely offset.

Figures showing the UK contracted by 0.4% between July and September meant the pound fell more than 1% against the US dollar, but the picture was different for the Footsie, which stood 77 points higher at 5284.4 by lunchtime.

The prospect of additional stimulus efforts and the continuation of low interest rates gave investors some comfort amid the economic gloom.

Lloyds Banking Group shares were higher as the figures appeared to revive speculation over its likely participation in the government’s asset protection scheme, limiting the amount of cash to be raised from shareholders.

Shares in the part-nationalised bank were up almost 4% or 3.65p to 98.45p, while Royal Bank of Scotland added 1.9p to 47.4p.

Miners drove the market’s latest rally with Vedanta Resources up 80p at 2366p and Kazakhmys 56p higher at 1308p.

Another healthy set of weekly trading figures from John Lewis Partnership lifted retail stocks, with Next ahead 59p at 1896p and Argos owner Home Retail Group 5.2p stronger at 306.8p.

Elsewhere in the consumer sector, Unilever shares were 52p higher at 1893p and cruise ship operator Carnival lifted 76p to 2137p.

Insurance firms were also in favour after Aviva added 5.5p to 434.6p and Prudential topped the risers board with a gain of 32p to 634.5p.

In a quiet session for corporate news, shares in BSkyB were in positive territory after it reported a 40% leap in first quarter profits and said net customer additions were better-than-expected at 94,000 in the three months to September 30.

Shares were 2% higher at one stage before the gains faded to leave the satellite broadcaster 3p higher at 562.5p.

Outside the top flight, doorstep lender Provident Financial held steady after it forecast further profits growth this year and said it had weathered the recession because of its cautious lending policies.

However, the Bradford-based lender said any pick-up in activity was unlikely until the spring at the earliest. Shares were down 10.5p to 949.5p.