The economic storm clouds lifted for the London market today after figures signalled the end of recession in the United States.
The better-than-expected performance by the world’s biggest economy – it expanded by 3.5% in the third quarter on an annualised basis – gave investors a boost after yesterday’s bleak session left the FTSE 100 Index 2% lower.
The economic worries continued for much of today’s session, but the release of the GDP numbers meant the Footsie reached lunchtime 29.5 points higher at 5109.9.
Miners benefited from the improved economic sentiment as shares in Kazakhmys lifted 75p to 1188p, Xstrata added 51.5p to 933.5p and Anglo American rose 112p to 2290p.
Shares in part-nationalised Royal Bank of Scotland and Lloyds Banking Group led the way – up 4.1p to 43.7p and 6.9p to 86.7p respectively – after Lloyds began sounding out investors about a £25 billion fundraising.
Lloyds also said a restructuring plan being thrashed out with European regulators was unlikely to have a material impact on the group.
This came as a relief to investors in both RBS and Lloyds after this week’s break-up of Dutch bank ING raised fears about large scale sell-offs.
Royal Dutch Shell was the biggest faller after its third quarter results received a lukewarm response.
The profits haul was slightly ahead of expectations, but this failed to make an impression on the City after rival BP smashed forecasts on Tuesday. Shell shares were down 71p at 1798.5p, a drop of 4%.
BG Group also dropped 20.5p to 1074,5p, but BP clung to recent gains as shares rose by a penny to 585.4p.
Among other companies reporting results today, AstraZeneca slipped 1% despite reporting a 22% rise in third quarter profits and raising its full-year earnings guidance for the second quarter in a row.
In the FTSE 250 Index, National Express fell 11% or 40.4p to 324.2p as it snubbed a takeover move by Stagecoach and said it would press ahead with its own fundraising plans.
Directories firm Yell, which is also battling to secure its long-term financial position, recovered from the weak start seen after it was forced to give lenders an additional day to approve a restructuring plan. Shares later recovered to stand 0.3p higher at 46.6p.
The biggest gain in the FTSE 250 Index came from defence services firm Qinetiq, which climbed 12% or 17.1p to 160p after appointing former De La Rue boss Leo Quinn as its new chief executive.