US confidence boosts afternoon trading

END-OF-DAY REPORT: Headline shares reversed early losses in a strong afternoon session to close modestly higher, investors spurred on by signs of rising US confidence and with volumes in London improving post-holiday.

At the close of business, the FTSE100 was up 23.66 points at 5,225.22 with the FTSE250 ahead 45.24 points at 9,825.14 and the FTSE Smallcaps 15.86 points lower at 2,786.69.

As a rise in consumer confidence pushed US markets ahead this afternoon, the enthusiasm crossed the Atlantic to London where stocks reversed morning declines to close modestly higher in better volumes than of late.

Mining stocks turned higher after a dull start, with a rush in the price of gold $1,247 an ounce giving a major boost to Fresnillo, up 34p at 1,090p, and Randgold Resources, 155p better at 6,080p.

Base metals also firmed, lifting Rio Tinto 76.5p at 3,300p, while BHP Billiton was up 33.5p at 1,831.5p and Anglo American gained 44.5p at 2,340p.

Banking issues were also under pressure, although only Barclays failed to rally as the market mood improved, down 1.55p at 302.4p. Lloyds gained 0.86p at 69.49p and Royal Bank of Scotland rose 1.08p at 44.58p.

HSBC jumped 6.7p at 643.7p on news it has completed the sale of its remaining US consumer finance auto loan run-off portfolio to Santander for $3.56bn.

Household and medical products group Reckitt Benckiser jumped 75p at 3,263p on news it has received FDA approval for its Suboxone Sublingual Film C-III.

Distribution and outsourcing group Bunzl gained 9p at 711p after reporting modest growth in the first half-year and raising its dividend.

However, chip maker ARM Holdings was top of the leaderboard, ahead 29p at 366.8p as M&A activity in the US sparked interest.

On the downside, pharmaceutical giant AstraZeneca slipped 13p at 3,228p on news the FDA has demanded additional clinical trial for its key drug motavizumab. Peer GlaxoSmithKline fell in sympathy, down 4.5 at 1,221p.

Oil producers were hit by crude remaining firmly under $74 a barrel, with BG Group sliding 17p at 1,049.5p and Shell down 4.5p at 1,668.5p.

The travel and leisure industry fared poorly, with InterContinental Hotels the worst blue chip of the session, off 31.07p at 982p. Fellow hotel operator Whitbread slipped 10.67p at 1,396p.