US data lifts mood on London Stock Exchange

The London market finished off weak January trading with a surge today as better-than-expected US economic data boosted investor confidence.

The London market finished off weak January trading with a surge today as better-than-expected US economic data boosted investor confidence.

Banks and miners helped cheer trading but the top-tier failed to claw its way back above the 5200 mark at the end of a poor month for the FTSE 100 Index.

The Footsie pushed ahead following the US output data, closing 42.8 points higher at 5188.5. Wall Street's Dow Jones Industrial Average was also ahead in early US trading.

Official figures showed the world's largest economy growing at an annual rate of 5.7% in the final three months of last year - the fastest since 2003.

David Jones, chief market strategist at IG Index, said the US growth figures seemed to "put firmly to rest" any worries that the economy could slip back into recession.

The news sent all Europe's major indices higher, with France's CAC 40 up 1.3% and Germany's Dax rising 1.2%.

But despite London's rise, the top-flight index overall has had a disappointing month and has suffered a correction of more than 4% in January.

In currency trading the pound was lower against both the US dollar and euro, with £1 worth $1.6 and €1.15.

In London, miners and financial stocks - which had previously borne the brunt of the sell-off - recovered some ground during the session.

Blue-chip risers included Xstrata up 27p to 1031.5p and Eurasian Natural Resources up 16.5p at 909p, as the sector shrugged off recent negative sentiment amid worries over the future growth of the Chinese economy. Fresnillo proved to be the exception, as the silver miner shed 5.5p to 671.5p.

Banks also recovered after confidence was knocked yesterday by Standard & Poor's repeated view that the UK is not among the world's most stable banking systems.

Barclays stood 5.6p higher at 270.55p, while HSBC rose 17.3p to 677.3p.

Oil majors were in the spotlight as crude prices edged up from their six-week low below 74 US dollars a barrel following the output data from the US.

Royal Dutch Shell and BP - both due to announce annual results next week - were 10.5p higher at 1673p and 0.1p lower at 586.9p respectively.

Retailers fell out of favour despite department store chain John Lewis reporting that last week's milder weather helped sales rise by an impressive 15.7%. Marks & Spencer rose 1% in the wake of the news, but gave back most of the gains later to stand 1.2p up at 348.8p

Figures from the Nationwide Building Society showing a 1.2% rise in house prices for January helped some property-related stocks in the FTSE 250 Index.

Website Rightmove added 27.5p to 528.5p or 5%, helped by a deal with Google to display property maps. Redrow added 1.5p to 131p.

The biggest Footsie risers were Whitbread up 45p at 1409p, Amec up 21p at 758p, Xstrata up 27p at 1031.5p and HSBC up 17.3p at 677.3p.

The biggest Footsie fallers were ICAP down 10.5p at 371.2p, TUI Travel down 4.8p at 259.7p, Prudential off 10p at 578p and BSkyB down 6.5p at 533.5p.

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