Global recovery hopes fire Footsie

LONDON'S Footsie moved within a whisker of the 5,700 mark yesterday, trading at levels not seen since late April.

The FTSE 100 was buoyed by renewed hopes over the global recovery, despite news of the first cut in US private sector jobs for seven months in September.

The index ended the day up 45.63 points, or 0.8 per cent, at 5,681.39, having hit an intra-day high of 5,695.51.

Michael Hewson, an analyst at CMC Markets, said: "Equity markets have managed to hold onto some of the gains of the past 24 hours despite a number of negative factors that initially weighed on the markets.

"Fitch started the ball rolling with a downgrade of Ireland to 'A+' from 'AA-'; with a negative outlook. The IMF also got in on the act, trimming global growth forecasts from 4.3 per cent to 4.2 per cent on concerns about household debt and the fragile state of the financial system."

America's Dow Jones Industrial Average overcame a weak opening as the autumn stock market rally continued apace.

Sentiment was lifted as investors expected the US jobs report would add to prospects for more action from the Federal Reserve to further stimulate the economy.

The Bank of Japan unexpectedly cut interest rates on Tuesday, supporting the view that other governments will act further to bolster an uncertain economic recovery.

UK policymakers announce their interest rate decision today amid mounting pressure to take action to help the recovery, although they are not expected to change rates or extend quantitative easing this month.

The pound weakened ahead of today's interest rate decision, down to €1.14 and just holding firm at $1.59.

The top flight benefited from another decent session for mining stocks after the improved recovery hopes lifted base metal prices and crude oil increased to around $83 a barrel.

Anglo American rose 110.5p to 2,752p, Kazakhmys advanced 56p to 1,483p and Lonmin was up 4 per cent or 67p at 1,790p.

There was also a 5 per cent gain for British Airways as it launched its transatlantic tie-up with Iberia and American Airlines. Shares were up 11.5p to 266.1p, which added to the 6 per cent rise seen on Tuesday after it posted better-than-expected traffic figures.

BA's rally was given further momentum by low-cost rival EasyJet, which raised its profits forecast and said the cost of disruption to European airspace caused by the Iceland volcano was likely to be less than expected. EasyJet shares topped the FTSE 250 Index risers board with a gain of 12 per cent, or 46.4p, to end the day at 433.3p.

Back in the top flight, shares in supermarket chain Sainsbury's fell, despite better-than-expected sales figures for the second quarter.The group, which was down 2.5p at 387.1p, posted like-for-like sales growth of 2.9 per cent, but was cautious over its outlook in the face of a "challenging" consumer environment.

Among other major Footsie losers was software group Autonomy Corporation, after it warned it will miss market expectations for its full-year revenue by around 3 per cent, triggering a 16 per cent or 301p slide to 1,551p.