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FTSE holds up despite fresh GDP gloom

London's blue chip share index maintained its new year rally despite gloomy figures showing the UK economy is half way to an unprecedented triple dip recession.

UK gross domestic product (GDP) for the final three months of last year came in at a worse-than-expected 0.3%, but London's top flight still ended the week more than 2% higher.

The FTSE 100 Index closed up 19.5 points at 6284.5 – its highest level since 2008.

The Dow Jones Industrial Average was also ahead after US new home sales figures posted their first annual gain since 2005. Growing fears that Britain will be stripped of its gold-plated AAA rating pushed the pound down against the euro to 1.17, but sterling moved up against the US dollar to 1.58.

The disappointing GDP number, which is subject to revision, reinforced the view of some City commentators that the new year share price rally is out of kilter with the current global economic uncertainty. Signs of recovery in the US economy and a raft of encouraging purchasing managers figures yesterday have contributed to the bullish mood.

And strong earnings from coffee chain Starbucks and household products manufacturer Proctor & Gamble helped boost sentiment.

Corporate updates were thin on the ground, but the FTSE 100 Index was driven to its highest level since May 2008 from improvements by oil giant Royal Dutch Shell, which climbed 30p to 22263.5p, and Vodafone after a rise of 1.6p to 170.3p.

But mining stocks were not immune from the bleak economic figures and were leading the fallers board. Evraz lost 2% or 6.9p to 300p, while Eurasian Natural Resources was down 8.1p to 331.1p.

In the FTSE 250 Index, which has outperformed its blue-chip rival over the past year, easyJet was one of the biggest risers as analysts continued to cheer the company's better-than-expected winter trading update.

Shares were 5% higher on Thursday and rose another 5% yesterday, by 46.5p to 945p.

Pubs group Enterprise Inns led the second tier risers board – up 7% or 6.8p to 101.8p – ahead of its trading update next Thursday.

The biggest FTSE 100 risers were TUI Travel, up 11.1p to 293.1p, Aberdeen Asset Management, ahead 9.9p to 415.4p, Sage Group, 7.6p higher at 325.7p and Polymetal International, up 26p to 1116p.

The biggest fallers were Eurasian Natural Resources, Randgold Resources, off 145p to 6020p, Evraz and Kazakhmys, down 16.5p to 753.5p.

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