State of the Union's a boost for FTSE

US PRESIDENT Barack Obama's state of the union address buoyed the London market yesterday as investors cheered moves to support growth in the world's biggest economy.

The FTSE 100 Index closed up 51.5 points at 5,969.21 - a rise of nearly 0.9 per cent - after Obama's promise to create jobs and boost growth.

He called for the lowering of the corporate tax rate as part of efforts to revive the American economy and said there would be a five-year freeze on domestic discretionary spending to cut national debt.

His comments helped switch attention away from Tuesday's dismal UK fourth-quarter gross domestic product figures, although Wall Street saw a more mixed start to trading after weak corporate earnings reports.

The Dow Jones passed the 12,000 mark for the first time since the summer of 2008 in early trading before easing back.

Michael Hewson, market analyst at CMC Markets, said: "Equity markets across Europe pushed higher after the state of the union address by President Obama signalled that he would endeavour to cut corporate tax rates in an effort to stimulate business."

The pound recovered strongly after the release of Bank of England minutes showed policymaker Martin Weale joined fellow rate-setter Andrew Sentance in calling for a 0.25 per cent rate hike to rein in inflation.

Sterling was up against the dollar at $1.59 and up against the euro at €1.16.

Market heavyweight Vodafone was among those on the rise after solid results on Tuesday from Verizon Wireless, which is 45 per cent owned by the British mobile phone giant. Vodafone shares rose 1.2p to 180.7p.

Glasgow-based temporary power firm Aggreko topped the risers' board after an upbeat broker note from Goldman Sachs. Shares surged more than 5 per cent or 75p to 1,485p.

Oil and gas producer BG was not far behind after an exploration venture in which it has a 30 per cent stake discovered "high quality" oil in deep waters at an offshore field in Brazil. Shares jumped 45.5p to 1,372p, a rise of 3 per cent.

It was joined by a raft of miners as the wider market bounced back from declines seen after Tuesday's news of a contraction in UK economic output.

Antofagasta led the sector higher with a 46p rise to 1,436p.

A downgrade for BP had the reverse effect on the oil giant, with shares dropping 5.3p to 491.7p.

Outside the top flight, WH Smith was higher despite the retailer announcing a further deterioration in like-for-like sales.

Chief executive Kate Swann said the retail chain remained on track to meet forecasts due to its focus on costs and more profitable product ranges. Shares were 2.1p higher at 482.9p.

Embattled sportswear retailer JJB Sports fought back from initial losses after the FSA hit it with a 455,000 fine for failing to disclose full deal costs when it bought two smaller rivals in 2007 and 2008.Shares were flat at 4.6p.

Irn-Bru maker AG Barr moved ahead, up 34p or 3 per cent to 1,111p, after the Cumbernauld-based soft drinks producer said sales so far in the fourth quarter were up 3 per cent despite disruption from last month's snow.