Retail sector gains propel FTSE into positive territory

Positive US industrial figures also helped the Footsie as it recovers recent lost ground, now having closed up for six of the last seven sessions.

The Footsie closed 32.58 points higher at 5276.64, with Wall Street's Dow Jones Industrial Average also in positive territory after a 1.7 per cent advance on Tuesday.

America's manufacturing data gave the dollar a fillip, with the pound losing ground as the greenback gained strength, down 0.6 per cent at 1.57 dollars.

There was also some better news on the US housing market, while President Obama added to economic cheer in a speech on the first anniversary of the emergency legislation he signed a year ago.

He said the American Recovery and Investment Act had saved at least two million jobs and avoided a deeper recession.

President Obama and Vice President Joe Biden launched a sweeping effort to convince sceptical Americans that the stimulus has been beneficial on the anniversary of a plan that was pushed through the US Congress by Democratic majorities.

President Obama, in a White House speech, said he believed the stimulus will save or create 1.5 million jobs in 2010 after saving or creating as many as two million jobs thus far.

His point was to show that the stimulus, while admittedly unpopular, had the effect of keeping the US economy from plunging into a second Great Depression.

But there was mixed news on the state of unemployment in the UK.

Official figures showed the wider measure of unemployment in the latest quarter fell by 3,000 to 2.46 million, although the claimant count rose by 23,500 to hit the highest level since Labour came to power

in 1997.

Among stocks, the boost from Barclays' record annual profits haul on Tuesday provided further momentum for bank shares. Part-nationalised Lloyds Banking Group rose 15/8p to 505/8p and Barclays added another 81/2p to 3021/4p after a 7 per cent hike the previous session following bumper profits of 11.6bn. Royal Bank of Scotland also cheered, up 5/8p to 337/8p.

Insurer Legal & General was another financial stock on the front foot after it said 2009 trading figures were well ahead of expectations.

It also forecast a rebound in core UK markets in 2010, leading to a shares rise of 2p to 763/8p – a rise of 3 per cent.

Fellow life and pensions groups likewise moved higher as investors welcomed news of a bounce back in the sector, with Prudential up 19p to 6031/2p.

Retailers joined them on the risers' board, led by Kingfisher and Home Retail Group, ahead 67/8p to 2131/4p and 71/2p to 2661/8p respectively, thanks to a broker upgrade for Argos and Homebase firm Home Retail.

But a number of stocks fell as they turned ex-dividend, meaning new investors will not take part in the next dividend payout, including energy group Scottish & Southern, down 34p to 1149p, and oil giant BP which slid 155/8p to 5725/8p.

Outside the top flight, shares in rail and plant firm Jarvis fell 10 per cent – down 11/4p to 11p – as it braced investors for a 5m operating loss in the year to April, due to spending delays from Network Rail.

The biggest Footsie risers were Man Group ahead 113/4p to 2395/8p, Wolseley up 67p to 1445p, Eurasian Natural Resources lifted 391/2p to 1006p and British Airways advanced 71/4p to 2063/4p.

The biggest Footsie fallers were Scottish & Southern Energy, BP and Rexam slipped 5p to 277p.