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London shares rise after Bernanke comments

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A broker monitors market movements at BGC Partners in London. London shares rose on Thursday, mirroring gains around the world, after Federal Reserve boss Ben Bernanke said he is in no rush to end its huge programme for stimulating the US economy. (AFP/File)

London shares rose on Thursday, mirroring gains around the world, after Federal Reserve boss Ben Bernanke said he is in no rush to end its huge programme for stimulating the US economy.

The benchmark FTSE 100 index closed 38.45 points or 0.59 percent higher at 6,543.41 points.

Bernanke said on Wednesday that the US central bank's stimulus drive would be kept in place "for the foreseeable future".

"After June's sell off in risk assets was attributed to seemingly hawkish comments from the Fed chairman last month, the July rally has built further momentum ... on the back of a much softer statement from the Fed chairman after markets closed last night," said Matt Basi, head of UK sales trading at CMC Markets UK.

Mining stocks led the London gains, spurred by ore positive talk about the global economy and a jump in prices on metals markets. The price of gold increased to $1,280.75 an ounce on the London Bullion Market from $1,256 on Wednesday.

Fresnillo shot up 12.67 percent to 1,018 pence, Randgold soared 7.24 percent to 4,402 pence and Ango American surged 5.44 percent to 1,337 pence.

Associated British Foods, owners of the Primark chain of cheap clothes shops, climbed 5.07 percent to 1,907 pence in the wake of its latest trading update.

Group revenues are up 9 percent in the 40 weeks to June 22 from a year earlier, with Primark sales rocketing by 22 percent, ABF said.

The company maintained its forecast of "good progress in full year adjusted earnings per share".

Serco plunged 7.94 percent to 626.50 pence and G4S dropped 5.59 percent to 213 pence after the Ministry of Justice accused the outsourcing specialists of overcharging the government for contracts to tag criminals.

"The current estimate of the amounts involved are in the low tens of millions of pounds in total for both companies since 2005," Serco said.

"We have confirmed that we will repay any amount agreed to be due."

GlaxoSmithKline eased 10.50 pence or 0.60 percent to 1,742.50 pence after Chinese authorities said managers at the pharmaceutical giant's Chinese operations had admitted wrongdoing.

"As a big multinational pharmaceutical company, GSK China in recent years rampantly bribed some government officials, a number of pharmaceutical industry groups and funds, hospitals and doctors," said ministry of public security said.

A GSK spokeswoman said: "We take any allegations of bribery and corruption very seriously," vowing that the company would cooperate fully with the ministry's planned inquiry.

On the currency markets, sterling strengthened to $1.5118 at 5:30 pm from $1.4939 on Wednesday evening but eased to 1.1601 euros from 1.1631 euros the previous night.

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