Quantitative easing stems FTSE losses

FTSE 100 Index up 13 points to 5248.2 by mid-morning

The London market pared its losses after the Bank of England opted for a smaller than expected £25 billion boost to the money supply.

The FTSE 100 Index was more than 70 points down at one stage but recovered to stand 18.1 points down at 5089.8 by the mid-session.

The Bank's small-scale increase to quantitative easing helped the pound and was taken as a slightly more positive sign for the economy, although rate-setters predict a "slow recovery".

More defensive stocks were in vogue in London as investors looked to protect themselves from market volatility.

Telecoms firm Cable and Wireless led the fallers board, down 8% or 12.1p to 135.9p after plans to demerge its UK business were overshadowed by the firm downgrading earnings guidance for its Caribbean arm this year.

Vodafone in contrast was one of the Footsie's top risers, adding 1.75p to 137.85p, while BT - due to announce interim results next week - climbed 2.9p to 136.5p.

In the retail sector, Tesco surged 9.65p to 418.65p and Marks and Spencer rose another 0.9p to 362.4p as it continued to benefit from Wednesday's better-than-expected results.

Among other so-called safer stocks, British American Tobacco and Imperial Tobacco added 38p to 1955p and 22p to 1813p respectively.

But hedge fund Man Group also joined the risers after a better than expected profit performance and an increase in assets under management. Man ticked up 1.8p to 326.8 as the firm also held its interim dividend steady.

Broadcaster ITV meanwhile was the top riser in the FTSE 250 following a trading update. It added 2.97p to 47.5p or 7% after it forecast a 4% rise in net advertising revenues in December and said it continued to beat BBC1 in terms of peak-time audience share.