FTSE up slightly

Better news from the UK jobs market and a strong session for financial stocks ensured the London market remained in positive territory today.

The FTSE 100 Index stood 6.9 points higher at 5292.6 by lunchtime, although the performance was down 40 points on the high point for the session.

Spirits were lifted by figures showing the first fall in Jobseeker’s Allowance claimant count since February 2008.

Overall unemployment was close to 2.5 million but economists said the figures offered more evidence of a return to growth for the UK in the final quarter of 2009.

Volumes were light as the Christmas break draws near, with many traders also on the sidelines ahead of the US Federal Reserve’s latest decision on interest rates, which is due later. While no change is expected, the accompanying comments could offer clues on when monetary policy will start to tighten.

In corporate news, Comet owner Kesa Electricals bettered market expectations with a 37% hike in half-year underlying pre-tax profits to £14.9m (€16.75m).

Its UK Comet chain saw further improvements in sales and losses, while the group was also benefiting from more stable conditions for its Darty business in France.

Kesa’s shares started well in the FTSE 250 before retreating towards their opening mark – up 0.3p at 154.8p – as investors also weighed up comments over an uncertain second half.

Pubs group Punch Taverns meanwhile fell 2.4p to 78.75p as it said profits remained under pressure due to lower beer volumes and weaker rental income. It has also increased its support to pubs to £2m (€2.25m) a month.

The cautious update unsettled rival Marston’s, which fell 6.3p to 89.4p.

Among top flight stocks, the majority of banks were back in positive territory after giving back some gains yesterday. Barclays was the biggest sector riser, ahead 1.6p at 286.15p, amid reports that tougher capital standards on the sector could be postponed.

Other financial stocks on the front foot included RSA Insurance, which lifted 2.8p to 118.5p, while life and pensions firm Prudential added 12.5p to 622p.

Guinness to Johnnie Walker drinks firm Diageo was one of the leading Footsie fallers, losing 15p to 1050p or 1.5% after Deutsche Bank lowered its rating. Brokers think deep advertising and promotional cuts could hinder recovery.

United Utilities topped the fallers board, down 9.5p to 504.5p. The stock turned ex-dividend, meaning shareholders are not entitled to the latest payout.