FTSE closes 38 points ahead

The London market headed for highs not seen since mid-November today after a strong morning session was bolstered by President Barack Obama's plans to extend tax breaks in the US.

FTSE closes 38 points ahead

The London market headed for highs not seen since mid-November today after a strong morning session was bolstered by President Barack Obama's plans to extend tax breaks in the US.

Supermarkets were in sharp focus on the FTSE 100 Index earlier in the day as Tesco reported robust third quarter sales and vague Qatari bid talk returned to boost Sainsbury's shares.

The Footsie closed 38 points ahead at 5808.5 after the strong start was consolidated by President Obama's decision to keep tax cuts introduced during the last presidency in place for another two years.

The pound edged higher against a softer euro at 1.18 as investors focused on eurozone debt problems. Sterling was up against the dollar at 1.58.

Tesco was also one of the leading risers, up 2% or 10p to 430p, after its third quarter figures came in marginally above market expectations.

It said like-for-like sales were up 1.5% in the three months to November 27.

This was better than the 1.2% increase during the first half despite easing food price inflation.

The retail giant admitted the recent snow disruption had since impacted sales, but said lost ground would likely be recovered as consumers stock up over the next few weeks.

Rival Sainsbury's was nearly 5% higher, up 16.1p to 373.6p, as traders once more speculated over the possibility of takeover interest from the Qataris.

Elsewhere, higher metal prices were helping the market as mining shares surged.

BP lifted 1% or 5p to 457p, while among miners Antofagasta was 71p higher at 1528p.

Wolseley's trading update was also well received, with shares up 3% or 50p to 1880p after it said first quarter trading had been better than it expected thanks to a strong performance in the US.

The Plumb Center parent reported first quarter like-for-like sales up 4%.

Fellow FTSE 100 stock Standard Life joined it in making gains after the insurer announced a £42 million deal to buy financial services technology provider Focus Solutions Group.

The takeover is expected to make it easier for the group's intermediaries to sell to clients and helped boost shares by 1.7p to 205.9p.

In the FTSE 250, a profits upgrade from Bellway sent housebuilding stocks racing higher.

Bellway added 54.5p to 612.5p - a gain of 10% - as it said interim profits would be up 20% as buyer interest has returned since the government spending review.

Rival Persimmon rose 32.6p to 415.3p, Charles Church owner Barratt Developments followed with a 4.9p rise to 83.7p and Taylor Wimpey was 1.7p higher at 28.9p.

The biggest Footsie risers were African Barrick up 34.5p at 600p, Resolution ahead 11.4p at 226.4p, Antofagasta up 71p at 1528p and Sainsbury's ahead 15.3p at 372.8p.

The biggest Footsie fallers were ICAP down 9p at 519p, Aggreko off 25p at 1538p, International Power down 6.3p at 413.6p and Serco off 6.5p at 565p.

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