Morning Markets: FTSE starts early recovery

The FTSE recovered some of last week’s losses in early trading, rising 37.28 points (0.7%) to 5,098.20 with gains from miners and banks.

Xstrata rose 3.6% to 985.4p after the miner announced it was reinstating its dividend despite a slide in earnings due to heavy one-off costs and weak commodity prices.

Randgold Resources climbed 3.17% to 4430p after upping its dividend by 30%. The Africa-focused gold miner said profits soared in the fourth quarter as it increased production and benefited from the continuing rise in prices.

Banks too were among the early gainers, with shares in RBS up 1.55% to 32.550p and Barclays 0.9% higher at 270.35p, while financials also featured among the losers.

ICAP fell 17.7% to 302.40p, Lloyds Banking Group dropped 5.59% to 48.39p and Aviva was down 4.15% to 365.20p.

US stocks pulled back losses in late trading to finish 10.05 ahead at 10,012.23 in a rocky day on Wall Street.

The Labor Department's monthly report said the unemployment rate unexpectedly fell in December to 9.7% from 10%. However, separate data said employers axed 20,000 jobs more than the 5,000 analysts expected.

Japanese shares fell to a two-month low as concerns over European debt continued to gnaw at investor confidence.

The Nikkei dropped 1.1% to 9,952, its lowest close since 10 December, with beer maker Kirin Holdings falling more than 7% after scrapping merger plans with fellow beer maker Suntory. Toyota fell 1.1% to 3,280 yen following its decision to recall more than 8m of its cars over safety issues.