Markets were lifted higher on Thursday morning by upbeat comments about central bank stimulus, though heavy losses from RBS and a number of miners were limiting gains for the FTSE 100.

Speaking to Senate's Banking Committee on Capitol Hill over the last two days, US Federal Reserve Chairman Ben Bernanke defended the Fed's asset purchase programme, saying that it was necessary until the job market improves substantially. He allayed fears that the central bank could start to scale down quantitative easing measures.

Meanwhile, his dovish comments were echoed by Mario Draghi, the President of the European Central Bank (ECB), who said that the ECB would not tighten monetary policy with inflation expected to stay well below the 2.0% target near term. He said that policy makers are "far" from exiting stimulus measures.

Markets across Europe reacted by pushing firmly into positive territory in the morning session, though sentiment is still fragile in the wake of the inconclusive Italian elections at the weekend, which saw anti-austerity parties secure a surprising portion of the vote.

"European stock indices are trading more or less where they closed on Friday, which suggests investors are still more concerned about the monetary policy of the major central banks than they are about the fundamental problems," said Market Analyst Craig Erlam from Alpari.

"As long as the Fed and the ECB continue with loose monetary policy, the rally is only heading in one direction," he said.

Nevertheless, traders continued to focus on the so-called 'sequester', the $85bn of automatic budget cuts that come into effect in the US tomorrow. The White House is said to be engaging in a "construction discussion" with congressional leaders about who to avert the cuts.

FTSE 100: RBS and miners provide a drag

UK lender RBS slumped in morning trade despite core operating profits coming in ahead of expectations. CEO Stephen Hester said that there was "important work still to do" as the the bank continued to be hit by fines from mis-selling products and rate-rigging scandals.

Copper giant Kazakhmys was the worst performer of the day after saying that it would be slashing its dividend for 2012 to reflect falling profits. The company also said that its CFO would step down in May, when its Chairman is also due to retire.

Other mining stocks were also lower as metals prices slipped: ENRC, Randgold, Polymetal and Anglo American were registering steep losses.

British Airways owner IAG soared as its operating loss of €107m for 2012 was better than the company's guidance in November of €120m.

British American Tobacco lit up after its 2012 revenues and volumes met forecasts and margins came in better than expected.

Utilities group National Grid was a high riser after agreeing to all of the UK RIIO price-control arrangements with regulator Ofgem, which it hopes will deliver further shareholder value.

Publishing and events firm Reed Elsevier also rose after reporting a rise in revenues for 2012, driven by volume growth, new products and expansion in lucrative markets.

Meanwhile, outsourcing firm Capita fell despite reporting a solid 14% increase in revenue in 2012,while underlying operating profit gained 10%.

FTSE 250: Howden Joinery and National Express jump in morning trade

Howden Joinery beefed up annual earnings and underlined its confidence in future trading with a six-fold increase in its full-year dividend. Howden, whose products are predominantly sold to small local builders for installation in public and private housing, said group revenue rose to £887.1m from £853.8m in 2011.

Tranpsort group National Express was also a high riser after cheering investors with news of cost savings and an increased total dividend for 2012.


FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 238.10p +7.40%
ITV (ITV) 125.20p +5.21%
Whitbread (WTB) 2,514.00p +2.44%
GKN (GKN) 269.80p +2.12%
Land Securities Group (LAND) 831.50p +1.96%
Reed Elsevier (REL) 711.50p +1.79%
British Sky Broadcasting Group (BSY) 855.00p +1.79%
Lloyds Banking Group (LLOY) 54.46p +1.42%
Croda International (CRDA) 2,591.00p +1.41%
BAE Systems (BA.) 355.00p +1.40%

FTSE 100 - Fallers
Kazakhmys (KAZ) 638.50p -5.69%
Royal Bank of Scotland Group (RBS) 333.00p -3.98%
Petrofac Ltd. (PFC) 1,444.00p -3.54%
Randgold Resources Ltd. (RRS) 5,490.00p -2.49%
Capita (CPI) 827.00p -2.48%
Eurasian Natural Resources Corp. (ENRC) 338.70p -2.39%
Shire Plc (SHP) 2,066.00p -1.71%
Polymetal International (POLY) 998.00p -1.48%
Melrose Industries (MRO) 256.20p -1.46%
Wood Group (John) (WG.) 764.00p -1.36%

FTSE 250 - Risers
National Express Group (NEX) 215.20p +10.19%
Howden Joinery Group (HWDN) 207.40p +8.93%
RPS Group (RPS) 249.00p +4.45%
Henderson Group (HGG) 158.90p +3.25%
Domino's Pizza Group (DOM) 535.50p +3.18%
COLT Group SA (COLT) 127.00p +2.83%
CSR (CSR) 459.40p +2.71%
Ladbrokes (LAD) 228.80p +2.60%
Fenner (FENR) 425.00p +2.56%
Derwent London (DLN) 2,180.00p +2.40%

FTSE 250 - Fallers
Spirent Communications (SPT) 154.20p -7.00%
Kier Group (KIE) 1,296.00p -3.71%
Petropavlovsk (POG) 297.10p -3.29%
Ferrexpo (FXPO) 234.00p -2.74%
Essar Energy (ESSR) 133.10p -2.70%
Afren (AFR) 140.50p -1.82%
Centamin (DI) (CEY) 54.00p -1.82%
JPMorgan Indian Inv Trust (JII) 388.80p -1.77%
Diploma (DPLM) 609.00p -1.77%
Bumi (BUMI) 325.70p -1.69%

BC

Related share prices
British American Tobacco (BATS) share price
Royal Bank of Scotland Group (RBS) share price
Reed Elsevier (REL) share price
Capita (CPI) share price
National Express Group (NEX) share price
Randgold Resources Ltd. (RRS) share price
National Grid (NG.) share price
Kazakhmys (KAZ) share price
Eurasian Natural Resources Corp. (ENRC) share price
Howden Joinery Group (HWDN) share price
International Consolidated Airlines Group SA (CDI) (IAG) share price
Polymetal International (POLY) share price