New gold highs help to lift FTSE back above 5,600

Gold rose to new record levels in morning deals pushing mining shares higher while technology stocks were boosted by good news in the US overnight.

The US DJIA finished the day up 22.10 points at 10594.83 while the broader S&P 500 ticked 0.4 points lower to 1124.

Japan's Nikkei climbed 116 points to 9626 and Hong Kong's Hang Seng added 288 points to 21,980 as technology stocks were lifted after stronger-than-expected results from Oracle and Research-In-Motion and news Texas Instruments is to raise its dividend.

The FTSE 100 added 62 points, or 1.1%, at 5602 in early morning deals, edging closer to the year's closing high of 5825 back in April.

Market watchers are expecting some volatility later as contracts for stock index futures, stock index options and stock options all expire today.  The phenomenon - known as triple witching - leads to a large number of deals as investors buy shares to close their positions. 

Ian Williams, strategist at Altium Securities, points out the FTSE has been trading in a very narrow range and today's expiry - sometimes referred to as freaky Friday - could well change that and he says it seems clear that in the short-term at least investors are feeling more optimistic.

In fact the volume of trades could be so high that some say it could overshadow US inflation and consumer confidence data later - although both will be scoured for further clues about the pace of the slowdown in the US recovery.

Gold climbed $9.8 to $1,283 per ounce, silver added 23 cents to $21 and copper was $5.35 higher at $354 per pound.

That helped to boost miners.

Vedanta led the pack, up 53p at £21.77, with Antofagasta up 28p at £11.83. BHP Billiton's gains were 23p higher at £19.86 but the advance was capped as HSBC downgraded its view on the group's shares to 'neutral' from 'outperform.' Speculation a Chinese consortium will counter BHP’s bid for Potash was also limiting gains.

In the technology sector, ARM was 7.2p higher at 396p and Autonomy was 34p higher at £18.46 as the good earnings news in the US added to investors’ confidence about the sector's prospects.

Invensys was up 14.5p or 5.24% at 291.7p, leading the pack higher after the group signed a deal to supply parts for Chinese trains.