London FTSE surges on back of growth figures

London (AFP) – London shares hit a seven-week high on Tuesday as investors cheered positive growth figures.

The benchmark FTSE 100 was up 1.04 percent to 6,769.91 points, which was the highest closing level since March 6.

“Markets may have been overly optimistic about the outcome of UK first quarter growth,” said Brenda Kelly, chief market strategist at IG traders.

“Expectations for a 0.9-percent rise on the quarter failed to materialise, but growth of 0.8 percent is still nothing to sneeze at,” she added.

Investors also remain worried on the escalating tensions in Ukraine as the West revealed its new sanctions included measures against Russia’s military chief.

“If all we see in the coming weeks is more sanctions, I think investors will be quite pleased,” said Craig Erlam, market analyst at Alpari traders.

“The danger comes when Russian troops cross the border, that’s when the dash for the safe havens (such as gold) will occur.”

Back in London, Legal and General was the star performer as the insurance giant added 3.20% to close at 212.90 pence.

Carnival was also in demand as the world’s largest cruise ship operator saw its shares rise by 3.18% to close at 2,370 pence.

Fresnillo was the biggest faller as the Mexican-based miner saw its shares slip 1.74% to close at 849.50 pence.

Builders merchant Travis Perkins was also under heavy selling pressure and saw its shares slide by 1.38% to close at 1,720 pence.

Lloyds Banking Group (LBG) was the most traded stock by volume, seeing 86.20 million units change hands, followed by Vodafone, which saw 55.17 million shares traded.

On the currency markets, sterling gained ground on its major rivals as official figures showed Britain’s gross domestic product grew by 0.8% in the first three months of 2014 compared with the fourth quarter of last year.

The positive growth figures helped the pound advance to $ 1.6828 at 5.01pm, up from 1.6807 on Monday night.

Sterling also stole a march on the European currency and was trading at 1.2187 euros, up from 1.2134 over same period.