LONDON’S FTSE 100 Index was more than 3.4 per cent ahead yesterday despite news the UK economy had suffered its sharpest contraction in 30 years.

The surge on the market came as US car maker Ford unveiled better-thanexpected first quarter results.

But the pound came under pressure after the official GDP data revealed the economy shrank by a worse-than-expected 1.9 per cent in the first quarter, with sterling down nearly one per cent against the euro.

Royal Bank of Scotland led the sector, up nearly six per cent, or 1.8p, at 33.3p. Lloyds Banking Group followed with a 4p rise to 100p.

A sector upgrade from broker Cazenove put mining stocks such as Xstrata at the head of the risers board. Cazenove said the robust Chinese economy should prop up commodity prices, sending the blue chip firm more than 14 per cent ahead, or 75p to 600p.

Eurasian Natural Resources added 52p to 602.5p, while Kazakhmys followed with a gain of 39p to 515.5p.

Insurers joined them as top share risers, as the sector surged ahead of the first quarter results next week from life and pensions firm Friends Provident, Aviva and Standard Life. Aviva, rebranding as Norwich Union, rose 34p to 273.25p, followed by Legal & General up 4.9p to 50.3p.

Among top tier fallers, British Airways was down 2.4p to 163.9p, after planned Spanish merger partner Iberia issued a profit warning.

Tesco dropped 1.6p to 355.4p, but in the second tier WH Smith and Debenhams rose 23.75p to 438.75p and 6.75p to 84p respectively as more analysts upped their forecasts in the wake of the interims yesterday.

Halfords also cheered 14.5p to 338p, but Sports Direct International shed 1p to 69p.