FTSE lifted by ECB chief's comments

LSEKirsty Wigglesworth/AP/Press Association Images

London's leading shares index has made tentative gains after the head of the European Central Bank reassured ailing countries that emergency support was on standby.

The FTSE 100 Index was 28.5 points higher at 5856 as traders took heart in Mario Draghi's comments on Thursday, in which the ECB boss said its recently unveiled plan to buy up government bonds was available on request.
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Craig Erlam, market analyst at Alpari UK, said: "His tone appears to have eased concerns in the eurozone with investors appearing less worried about Spain's lack of action and just happy that the backstop is in place if needed."

Meanwhile, investors looked ahead to a key jobs report in the US to be released later, in which some analysts have forecast a slight improvement in the figures. However, the US non-farm payroll report is not expected to show significant change from previous months, with the country still unable to generate the level of new jobs needed to bring the unemployment rate down.

As the US presidential election looms into view, the figures will be closely watched by the American public as well as analysts.

In a session devoid of major corporate news, the improved sentiment helped riskier assets such a miners. Eurasian Natural Resources topped the FTSE 100 Index with a rise of 16.5p to 331.2p, while Kazakhmys added 31p to 737.5p and Vedanta Resources lifted 46p to 1110p, a rise of 4%.

Barclays was the best performing banking stock, rising 3.5p to 226p, but fellow bankers Royal Bank of Scotland and Lloyds Banking Group were in the red with falls of 0.2p to 259.6p and 0.1p to 37.9p respectively.

Supermarket giant Tesco continued its depressed run, sliding another 3%, after revealing its first fall in profits since 1994 - a 12% drop to £1.7 billion. Shares fell a further 8.2p to 309.9p to the lowest level in more than three months, despite the grocer's attempts to reassure the market that its turnaround plans were on track.

Outside the top flight, shares in business communications firm KCOM slid 7% as it warned economic uncertainty was continuing to result in delays in new business investment decisions by customers. The stock fell 6.7p to 77.6p, although the company has continued to perform in line with expectations.

Meanwhile, FirstGroup continued to suffer after having the carpet pulled from under its feet when the Department for Transport scrapped its award of the West Coast Main Line franchise to the transport group. Shares were down 3.2p at 197.4p.

© 2012 Press Association
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