FTSE off to strong start as driven by Compass and miners - Emirates24|7

FTSE off to strong start as driven by Compass and miners

Britain's FTSE 100 index rose 0.8 per cent early on Thursday as miners gained on firmer metal prices, while shares in caterer Compass Group rose after its strong trading statement.


By 0843 GMT, the FTSE 100 was up 44.2 points at 5,704.5, after falling 0.5 per cent in the previous session.


The UK benchmark index has lost 11 per cent so far this year thanks to the credit market turmoil and fears of a US recession, and is on course for its worst quarter since the third quarter of 2002 and its third quarter of losses.


"The initiatives that we have from the Federal Reserve and also the statement by the Bank of England at the end of last week providing a broader range of assistance to banks ... are helping stabilise sentiment," said Darren Winder, equity strategist at Cazenove.


"But it's still in early stage. I am sure there will be renewed difficulty issues to be confronted by the financial sector. We will continue to see larger than normal daily movement in larger indexes."


Compass rose 4.1 per cent after the world's biggest caterer said trading in the first five months of its financial year had been ahead of its expectations and that it was coping with food price inflation.


Europe's biggest home-improvements retailer Kingfisher shed 1.6 per cent after it reported lower annual profit and said it was cutting its full-year dividend by nearly a third.


Hedge fund Man Group gained 2.3 per cent after it said underlying profit for the year ended March 31 would be ahead of analysts' average forecast.


Also in the financial sector, London Stock Exchange slipped 0.4 per cent, despite saying it was confident of a good outcome for the financial year ending March 31.


Banks were firmer, with Barclays, Royal Bank of Scotland, HBOS, Lloyds TSB, HSBC and Standard Chartered up between 0.7 and 2.9 per cent.


Miners tracked higher metal prices, with gold jumping to a one-week high. Xstrata put on 2.4 per cent, Anglo American added 1.4 per cent, and BHP Billiton tacked on 1.6 per cent.


The final reading of US fourth-quarter gross domestic product data will offer a further gauge of the state of the world's largest economy.


Two US Federal Reserve officials warned on Wednesday that the central bank needed to be wary of a rise in inflation even as it navigates the country through an economic slowdown.


FirstGroup added 3 per cent after the bus and train operator said it had continued to deliver a strong trading performance throughout the second half of the year. (Reuters)