FTSE rebounds after earlier losses

The FTSE 100 Index shook off earlier losses and continued its recent rally today after better-than-expected job figures in the US lifted the market.

The top flight, which is at its highest level since June 2008, closed 12 points higher at 5875.4, after the US Labor department reported a total addition of 151,000 jobs in October, the first gain since May.

The FTSE gains followed a major week for markets after the Federal Reserve's fresh stimulus for the US economy triggered a wave of buying.

The dollar pulled back from its lows after yesterday's sharp falls, and was just up on the pound at 1.62. Poor retail sales in Europe hit the euro, which was down against sterling at 1.15.

The latest rise in London came despite uncertainty in the banking sector following updates from Royal Bank of Scotland and HSBC.

RBS shares initially started on the front foot after it said bad debt impairments continued to drop and it achieved underlying earnings of £726m (€838.5m) for the third quarter. Overall losses for the period were £1.4bn (€1.6bn) after its results continued to be skewed by volatility in accounting charges.

But with the fourth-quarter market environment set to remain challenging, particularly in investment banking, RBS shares dropped 2.1p to 45p.

Pressure on the sector also came from HSBC after it said its third quarter profits grew more slowly than in the first half. Bad debts continued to fall but shares were 12.1p lower at 683p, a decline of more than 1%.

Lloyds Banking Group also retreated, down 0.4p to 69.8p, despite impressing investors earlier this week with the appointment of Santander's UK boss as chief executive.

Joining RBS at the top of the fallers board, Rolls-Royce lost another 5% after Qantas said the engine failure that forced an Airbus A380 to make an emergency landing was "probably" caused by a material failure or a design fault. Shares fell another 30.5p to 591p after dropping 5% yesterday.

Military kit firm Cobham has also endured a difficult week after its warning that its technology divisions were unlikely to grow revenues in 2010 due to delays in winning US contracts. Shares remained under pressure today with a decline of 3.2p to 204.8p.

In other corporate results, Carphone Warehouse shares jumped 10% - up 32p to 340p - after strong sales of smartphones in the UK and United States prompted it to raise its earnings guidance for the year. It also told investors that it planned to pay its first dividend as a slimmed down business.

And medical devices firm Smith & Nephew jumped 5%, up 29p to 587.5p, on news that its third quarter earnings figures were not as weak as some analysts had feared beforehand.

The biggest Footsie risers were Vedanta Resources up 129p at 2319p, Smith & Nephew ahead 29p at 587.5p, Eurasian Natural Resources up 42p at 991.5p, and Invensys ahead 13.2p at 313.5p.

The biggest Footsie fallers were Rolls-Royce down 30.5p at 591p, Royal Bank of Scotland off 2.1p at 45p, Rexam down 6.5p at 318.5p, and HSBC off 12.1p at 683p.