FTSE climbs 50 points

A much-needed rally for London shares was sustained today after the US Federal Reserve helped to address some of the panic in world markets.

Confidence was boosted by comments from the Fed that it was likely to keep interest rates at near zero until the middle of 2013 to help the ailing economy.

The FTSE 100 Index joined other markets in recovering from the bloodbath of recent sessions, with the top flight up 50.1 points at 5218.2 after improving 96 points during a long overdue rally on Tuesday.

The buying interest was maintained despite forecasts from the Bank of England that GDP is set to grow by around 1.4% in 2011, down from its estimate of around 1.8% in May.

Governor Mervyn King said the outlook for the global economy had deteriorated as a result of the eurozone and US debt crises.

The market's improved run of form included a return to the mining sector, with Vedanta Resources up 68p at 1385p and commodities trader Glencore International 13.5p higher at 392.43p.

Lloyds Banking Group, which has been badly affected by the recent sell-off, added 1.8p to 33.9p, a rise of 6%, while Barclays was 6.8p higher at 186.1p and Royal Bank of Scotland cheered 0.9p at 27.1p.

The biggest rise of the session came from insurer Standard Life after it reported half-year results ahead of market expectations.

The 44% rise in operating profits to £262m (€296.3m) reflected ongoing cost cutting measures and lower commission costs as more IFAs switch to fee-charging ahead of next year's overhaul of retail distribution rules.

Standard shares jumped more than 12% or 22.1p to 196.2p, while elsewhere in the insurance sector Aviva lifted 11.45p to 349.25p and Legal & General gained 3.7p to 100p.

In corporate news, confidence in the travel sector was boosted by a resilient update from Thomson holidays owner TUI Travel.

The number of summer holidays booked by its UK customers was down 2% since its last update in May, but the company said this was a "particularly pleasing" performance given the weak consumer sentiment.

Shares rose 3.45p to 170.95p and helped trigger a gain of 4.6p to 57.9p for troubled rival Thomas Cook.

Retailer French Connection was another stock on the front foot after it revealed half-year like-for-like sales in its UK stores were ahead of last year.

The stock improved 6.4p to 64.4p, a gain of 11%.