Miners buoy the Footsie as punters plough even more money into gold

The FTSE 100 index was back on course as it nudged towards the 5400 level, posting a rise of 36.35 at 5360.31.

Once again it was being supported by strong showing by the miners and the banks.

Lloyds Banking Group continued to attract support in the wake of publishing the terms of its heavily discounted £13.5 billion rights issue. The shares responded with a rise of 1.33p to 95.14p. The new shares are being issued at 37p.

The gold price extended this week's record breaking run as it traded above the $1178 an ounce level, stretching its rise since the start of the month to 13%. Investors are continuing to plough cash into the precious metal as they take advantage of a weak dollar in the short term amid fears that the US recovery might have stalled. There are also signs that the price is being held up by India which has indicated that it will continue adding to the 200 tonnes that it recently bought.

Not surprisingly, Randgold Resources responded positively to the hike in gold's price, trading near the top of the leaderboard rising 145p to 5185p. It was closely followed by Anglo American, 79p higher at 2696p, and Xstrata, up 30p at 1112p. Other miners to go better included platinum producer Lonmin, up 47p at 1802p, and Kazakhmys 33p better at 1314p.

United Utilities, down 4¼p at 482¼p, is the latest water supplier to blame the recession for a drop off in demand as it struggled to make headway during the first six months of the year. The UK's biggest water supplier is focused in the flood-hit North-West and saw underlying operating profits advance only 1% to £369.9 million. Rivals Severn Trent, up 17½p at 986½p, and Northumbrian Water, a tad firmer at 253p, have already complained this week about the impact the recession is having on water demand among its business users. Tomorrow the industry regulator Ofwat is due to announce how much more the water companies can charge customers over the next five years. As already indicated, the price rises are expected to be less than generous.

QinetiQ dropped 8½p to 170p, making it the biggest loser among second liners, after interim results failed to live up to expectations. The defence technology specialist which makes bomb disposal robots for the US military, posted a 2% drop in pre-tax profits during the first six months of the year to £45.1 million, on revenues 11% higher at £806.3 million. QinetiQ, which lists the Ministry of Defence as its biggest customer, blamed political and economic uncertainties in its two main markets the UK and the US.

Disappointing trading results from several blue-chip companies and a revising down of the US GDP provided a dull backdrop to trading in New York overnight. The Commerce Department reduced its reading of the GDP from 3.5% in the third quarter to 2.8% after consumer spending proved to be weaker than thought.

There was also bad news on the housing front with prices rising less than expected in September, while falling oil prices depressed commodity-based stocks. The Dow Jones finished 17.24 off at 10,433.71.

Trading conditions were mixed in Asian markets this morning. In Tokyo, leading shares rallied after hitting a four-month intraday low, to post modest gains on the day. Technology shares and banks were sold amid persistent concerns about equity funding, a rising yen and uncertainty about government economic policy. The Nikkei 225 rose 40.06 to close at 9441.64 after earlier touching 9366.33.

Shares were down in Hong Kong, dragged lower by banks, as investors fretted about possible capital-raising plans. The Hang Seng index was down 41.23 points at 22,381.91 by midday.