TUESDAY MARKET CLOSE: Dovish Yellen helps markets take off

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The Footsie surged more than 1 per cent as the first public comments from new Federal Reserve chief Janet Yellen were taken as being supportive of risk.

Although she said the Fed was likely to continue trimming back its vast money-printing programme, Yellen reassured investors that she still considers the US economy to be in need of some extraordinary support.

Michael Hewson, chief market analyst at CMC, said: “She emphasised that future tapering was very much data dependant and that emerging market volatility was not a concern given that these markets were perceived to be much better positioned to manage the current uncertainty than they were at the end of the 1990s.”

The FTSE 100 Index added 81.11 points at 6,672.66. Expectations of a loose monetary policy in the US pushed gold to its highest levels since November and helped precious metals miners to lead the gains.

Fresnillo jumped more than 5 per cent, up 49p at 911.5p, while Randgold Resources added 175p at 4,705p.

It was a mixed day for retailers after strong January retail sales numbers helped the likes of Sports Direct and Marks & Spencer, both up more than 3 per cent at 708p and 485.6p respectively.

But on the flip side the supermarkets were tipped lower after separate data showed that the grocery market had slowed. Sainsbury’s was down 2 per cent at 348.9p and Tesco dipped 1.5 per cent to 318.7p.

But Barclays was the biggest faller, with shares down almost 4 per cent after it revealed that profits in its investment bank division slumped 37 per cent over 2013.

With fourth-quarter underlying profits also flagging, the shares were off 10.3p at 264.7p.