The FTSE 100 index has moved into the afternoon session sporting a gain of over 50 points while bond traders seem to have relaxed a bit after yesterday's dramatic swings in the price of British government debt.
Wednesday's pre-budget report left the forecast for gilt issuance over the next few years largely unchanged, which lead UK government bonds to rise slightly. But yesterday, traders took fright as they looked at the small print and fretted about the lack of any concrete plans to reduce the debt mountain.
Gilt futures dropped by more than a full point, driving the spread between UK and eurozone government bonds to its widest in a year. But in Friday morning trading, the panic seemed to be over with gilt pricing strengthening.
Across the wider market, the FTSE 100 index had added 53.07 points to 5297.44 points by lunchtime, spurred ahead by mining and oil stocks as commodity prices rise on the back of strong Chinese production data.
Official data released earlier today revealed record demand for oil - jumping 20% in November compared with last year - with record production of copper, aluminium, zinc and iron ore. Steel production, however, was down.
With oil futures tipping over $70 a barrel, BP is up 6.6p at 580.3p with Shell A shares up 14.5p at 1837.5p. Kazakhmys tops the FTSE 100 leaderboard, up 50p at £12.76 with Vedanta up 81p at £23.96.
