FTSE gains early ground

Heavyweight banking and mining stocks helped the FTSE 100 Index gain ground ahead of comments from the US Federal Reserve later today.

The Footsie added 21.6 to 5615.5 as markets awaited the Fed’s latest interest rate meeting and assessment of the world’s largest economy.

The top flight’s mining stocks underpinned the advance as a weaker dollar pushed up base metal prices.

Sterling gained to 1.51 against the greenback while the euro also edged higher against the dollar after EU finance ministers said they had a blueprint for financial help for the struggling Greek economy.

Eurasian Natural Resources was the Footsie’s leading riser – up 31p to 1164p or 3%. Other miners on the front foot included Antofagasta and Fresnillo, which gained 15p to 1016p and 12p to 832p respectively.

In a quiet session for corporate news, security firm G4S slipped despite posting a 10% rise in underlying profits to £500.3m (€552m).

While the company has weathered the recession, it said organic revenues would be flat this year after a rise of 3.7% in 2009 and growth of 9.5% in 2008. Shares have enjoyed a strong run and were down 6.9p to 271.7p today, a fall of more than 2%.

But Royal Bank of Scotland’s rally continued today as investors digested speculation that it is planning to restructure up to £10bn (€11bn) of its existing debt in a bid to boost its capital strength. Shares rose 0.4p to 43.1p.

Other banks making progress included Barclays, which added 6.7p to 355.3p, and HSBC, which was 6.8p dearer at 687.8p.

BT Group meanwhile climbed for a second successive session, up 1.4p to 126.1p, as it continued to benefit from yesterday’s broker upgrade from Citigroup.

Royal Dutch Shell was another riser, up 22p to 1852p, after chief executive Peter Voser unveiled a strategy update that included plans for more cost savings and an upstream production target of 3.5 million barrels of oil a day by 2012, up 11% on last year.

In the FTSE 250, department store chain Debenhams edged 0.75p lower to 70.25p after a trading update left markets underwhelmed. Sales growth edged 0.3% higher in the first half and profits are set to come in ahead of last year in line with City hopes.

Pubs group Wetherspoon was the leading second-tier faller, losing 4% or 21.5p to 504p after HSBC cut its rating on the stock.