Market report: Footsie marches on foreign news

LONDON FTSE 100 CLOSE 5,757.86 +28.93

ROBUST economic growth in China and more forecast-beating corporate profits on Wall Street helped the FTSE 100 index to march ahead yesterday.

America's Dow Jones Industrial Average hit its highest level of the year in early trading - past 11,100 - after a batch of better-than-expected earnings from construction firm Caterpillar and fast food chain McDonald's.

The Footsie also remained near to its highest point since April after lifting 28.93 points or 0.5 per cent to close at 5,757.86, despite weaker-than-expected UK retail sales and a drop in oil prices.

The cost of crude slipped to $82 a barrel as a stronger US currency made dollar-based commodities more expensive for investors with other currencies. The poor retail sales data sent sterling to a six-and-a-half-month low against the euro - at €1.13 - on renewed fears of more quantitative easing from the Bank of England.

Michael Hewson, analyst at CMC Markets, said: "Equity markets have been in buoyant mood today despite continued mixed economic data.

"The German DAX hit a 26-month high, while the FTSE 100 touched its highest levels since April as the giddying effects of the expectation of stimulus from the Federal Reserve - as well as good earnings figures out of the US - proved to be a heady cocktail for investors."

Among stocks, BP was down 2.9p at 432.5p while exploration firm Tullow Oil dropped 26p to 1,227p after it said drilling at its Inyina-1 well in Ghana had found water instead of oil.

The biggest top-flight fall came from Thomson holidays-owner TUI Travel after it announced the resignation of its chief financial offer and said it would restate its earnings for the last financial year.

The group admitted it will have to write off a total of 117 million due to its failure to reconcile the separate accounting systems used in the retail and tour operator businesses within TUI UK. Shares slumped 11 per cent or 25.4p to 205p as TUI also revealed a slowdown in UK bookings growth for this winter.

BT shares soared more than 4 per cent after a judge ruled the pension liabilities of employees who joined the company after privatisation would be covered by the UK government if the group went bust.

The UK government had argued that its liabilities should only extend to those employees who joined the pension scheme before BT was privatised in 1984.Shares were up 6.1p at 156.3p.

Consumer goods firms dominated the risers board after whisky giant Diageo added 27p to 1,187p, Unilever lifted 46p to 1,846p and Reckitt Benckiser cheered 134p to 3,550p.

In the FTSE 250 Index, bookmaker William Hill was up 7.2p to 168.9p after it said a run of more favourable sporting results in the third quarter meant operating profits should be at the top end of forecasts.

Drinks maker Britvic added 26.8p to 497.3p after Altium Securities upgraded the stock to buy from hold following a strong full-year trading update.

At Debenhams, investors were cheered by a return to like-for-like sales growth and a pledge by the company to reinstate dividends in 2011. With full-year pre-tax profits up 20 per cent, shares lifted 5p to 76.5p.