Festive rally on FTSE

The festive rally for the London market showed no signs of stalling today after fresh gains for mining and banking stocks.

In its third positive session in a row, the FTSE 100 Index climbed 41.3 points to 5369.9 and within 25 points of its best point for the year.

Traders warned that volumes were thin in the run-up to Christmas and cautioned against reading too much into the week’s gains.

There was little movement in shares after it emerged the Bank of England voted unanimously to keep interest rates at their record low and maintain the money supply programme at its current value.

“The Bank is clearly keeping all its options open in order to protect the recovery process,” IG Index trader Philip Gillett said.

The pound was little moved against the dollar and euro following the news.

The best US home sales in three years were the trigger for earlier gains across world markets, with the Nikkei almost 2% higher in Tokyo and other European markets also stronger. The figures offset earlier gloom about US economic output for the third quarter being revised lower.

Oil stocks, which have been responsible for much of this week’s rally, posted further gains as BP lifted 6.3p to 603.8p and Royal Dutch Shell rose 15p to 1822.5p. This was after oil cartel OPEC elected to keep production unchanged in 2010.

Cairn Energy fell 0.7p to 338.3p as the strong run seen after news of drilling progress off the coast of Greenland finally came to an end.

Mining firm Eurasian Natural Resources topped the Footsie risers board with a gain of 24.5p to 892.5p, while Standard Chartered was the leading bank with a rise of 35p to 1582p. Barclays added 4.85p to 277.3p.

Outside the top flight, shares in Ideal Shopping Direct fell 3.5p to 122.5p after the home shopping firm announced a £5m (€5.6m) deal to buy the gardening products business set up by its founders two years ago.