FTSE closes in the black as Citi results boost financials

Citi, which is 12 per cent owned by the US government, made earnings of 2.15 billion US dollars (1.4bn) between July and September – beating market forecasts and raising investor hopes for a decent third quarter reporting season from banks across the globe.

The FTSE 100 Index closed 39.15 points higher at 5742.52, while the Dow Jones Industrial Average in America also rose after the news.

US data showing improved home-builder confidence also provided encouragement, offsetting disappointing news that industrial production slipped 0.2 per cent in September.

Banking stocks were among the main gainers on the Footsie following the results, with Lloyds Banking Group advancing 2p to 721/4p, Barclays ahead 41/4p to 2891/4p and HSBC up 71/8p to close at 6603/8p.

BT continued to rise after a statement it released on Friday which allayed fears about the telecom firm's exposure to government spending cuts.

The group, one of Whitehall's largest suppliers of IT network services, has signed an agreement that means all of its contracts remain in place. Shares rose another 1 per cent, or 21/4p to 1495/8p yesterday.

But there was pressure on mining stocks caused by a rebound for the beleaguered US dollar.

A signal from Federal Reserve chairman Ben Bernanke that more quantitative easing was on the cards dealt a fresh blow to the greenback on Friday, leaving it at a nine-month low against the pound.

The dollar fought back from last week's lows on Monday, with the pound falling to just under 1.59 dollars.

Randgold Resources featured on the fallers' board with a drop of 145p to 6420p, while a fall in copper prices and a downgrade from HSBC meant Xstrata eased 6p to 13051/2p.

Miners Rio Tinto and BHP Billiton were also weak after plans for an iron ore joint venture in western Australia were called off after the pair were told that the proposal would not be approved in its current form by the European Commission, as well as by regulators in Australia, Japan, Korea and Germany.

The setback had been expected by investors, limiting the decline in the two share prices as BHP fell 14p to 21851/2p and Rio Tinto dropped 63p to 4080p.

In corporate news, Vertu Motors soared 18 per cent after it posted a rise in first-half profits and said it was trading ahead of expectations following a strong new car performance in the key trading month of September.

The Newcastle group said while new car retail volumes declined 19 per cent in the UK as a whole last month, the group only saw volumes fall by 2.6 per cent and it was now on course to deliver a record profit in the full financial year. Shares were 41/2p higher at 33p.

Shares in Peroni Nastro Azzurro brewer SABMiller were up after the company posted a rise in sales volumes in the six months to September 30, helped by double-digit gains in lager volumes in Asia and Africa. Shares rose 91/2p to 2069p.

The biggest Footsie risers were Autonomy Corporation up 71p to 1419p, Lloyds Banking Group, Arm Holdings ahead 111/8p to 3991/8p, and 3i Group up 77/8p to 3021/4p.

The biggest Footsie fallers were Randgold Resources, Kazakhmys off 25p to 1359p, Rolls-Royce down 11p to 624p, and Vedanta Resources which finished the session 35p lower at 2253p.