MIDDAY REPORT: Headline shares remained firmly higher in midday trade, with banks leading the main index higher on the back of encouraging moves by the Governor of the Bank of England last night.
At midday, the FTSE100 was up 35.42 points at 5,502.47 with the FTSE250 ahead 118.2 points at 10,692.8 and the FTSE Smallcaps 17.19 points better at 2,907.56.
US stock futures suggest a positive start on Wall Street ahead of a raft of economic data.
Dow Jones Industrial Average futures were up 48 points at 12,654, S&P500 futures added 5 points at 1,331 and Nasdaq futures rose 12 points at 2,544.
News that the BoE plans to create a sterling liquidity facility to aid banks, and plans to soon have a form of credit easing operating to boost lending in the UK economy, raising hopes of more QE, and giving the markets in London a welcome boost.
Banks led the blue chips higher, with Royal Bank of Scotland topping the leaderboard with a gain of 16.55p (7.2%) at 245.95p. Lloyds gained 1.37p at 31.12p and Barclays rose 10p at 202.75p.
Insurers followed the trend, with Standard Life ahead 1.9p at 221.3p, helped by an upgrade to hold from sell at Societe Generale. Prudential rose 4.75p at 714.75p and Aviva climbed 3.85p at 268.45p.
Asset managers also improved, with Schroders up 10p at 1,253p and hedge fund firm Man Group 2.68p better at 71.83p.
Buoyant basic resources prices gave the miners a lift, with Vedanta Resources the pick of the crop, up 40.75p at 943.75p. Elsewhere, Rio Tinto jumped 56.5p at 2,922.5p and BHP Billiton advanced 27p at 1,803.5p. Randgold Resources improved 147.5p at 6,032.5p as gold edged over $1,625 an ounce.
Oil producers reacted positively to a tick-up in crude prices, with Shell ahead 39.75p at 2,21475p and BP up 9.48p at 426.18p.
Commercial property remained popular, with British Land up 6.7p at 493.6p and Land Securities 6p higher at 732.5p.
Drinks giant Diageo ticked up 7p at 1,606p on news it has acquired an additional 10.62% stake in Hanoi Liquor Joint Stock Company (Halico) in Vietnam for approximately £14m.
On the downside with blue chips, many retailers remained in the doldrums, with Marks & Spencer down 4p at 319p, Next off 16p at 3,094p and DIY specialist Kingfisher 1.25p lower at 270.45p.
The extravagant price of Premier League football rights continued to plague BSkyB ,down 17.25p at 653.75p, while BT Group eased 1.25p at 200.45p.
The cigarette makers lost ground as their safety stock status became redundant in the rising market, with Imperial Tobacco down 24p at 2,361p and BAT off 18.5p at 3,119p.
Temporary power provider Aggreko took the wooden spoon, slumping 86.5p at 2,073.5p, despite putting in a strong performance in the first half. Investors were concerned that sales may slow in the second half, despite the Olympics.
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