London close: Stocks finish higher after late rally

After an early fall, London's benchmark index rallied in afternoon trade to finish a few points higher, extending gains from the previous three sessions.The last time the FTSE 100 finished higher was on April 2nd when it hit 5,875."Stocks and other risky assets have traded higher since Friday. Comments by Mario Draghi that the ECB were ready to act with the EFSF to bring down yields, along with much better than expected Non-Farm Payrolls last month had buoyed markets until now," said analyst Craig Erlam from Alpari."A lack of noise from the Eurozone since has left investors impatient and concerned about the safety of their investments. This has caused a shift back into safe haven assets, resulting in stocks falling and yields on Spanish and Italian debt rising, with the former touching 7%," he said.While last week's optimism about the ECB injecting more stimulus starts to fade, stocks were given a lift today by a decent start in equities across the pond. Wall Street's benchmark indices rose after the opening bell on the back of well-received results from Hewlett-Packard; the S&P 500 reached a three-month high today.Meanwhile, credit ratings agency S&P lowered its outlook on Greece last night from 'stable' to 'negative' to reflect the possibility of a downgrade if the country fails to secure the next tranche of aid. In a statement, S&P said: "Following delays in implementing budgetary consolidation measures and a worsening Greek economy, we believe Greece is likely to require additional financing for 2012 under the EU/International Monetary Fund." The Bank of England's inflation report released this morning said that the UK economy will not grow this year, compared with its May estimate of 0.7% growth. "We will get back to the same growth rates we experienced before the crisis?.?.?.?but it's quite impossible to know over what time period," said BoE Governor Mervyn King. However, the news failed to send markets any lower though as the Bank's comments were widely expected. Analyst Simon Hayes from Barclays Capital said this afternoon in an emailed statement: "There were no major surprises in the August Inflation Report. The MPC's overall assessment remained downbeat as it put through sizeable cuts to its GDP forecasts and lowered its near-term forecast for inflation. We continue to expect more QE in November and possibly a rate cut (markets are not currently discounting this), although Governor King sought to downplay the prospects of the latter."StanChart bonus back after steep sell-off Following a 16% slump yesterday, emerging markets-focused bank Standard Chartered was leading the risers today. It was revealed yesterday that a US banking regulator accused it of collusion with the government of Iran to hide transactions from authorities. ??Pharma giant AstraZeneca was under the weather after its study of BTG's CytoFab drug showed that there were no significant improvements versus a placebo. Both Astra and BTG have now halted further development and BTG said it will take a £28m one-off charge this year. ??Rio Tinto, the mining and resources giant, jumped after managing to beat market expectations on earnings in the first half. Mining peers Fresnillo, Randgold and Xstrata were also making gains. ??Engineering group GKN was a heavy faller after going ex-dividend - from today, investors will not have the right to the group's latest dividend. Also going ex-div today were FTSE 350 peers Reckitt Benckiser, Reed Elsevier, SABMiller, BT Group, Rexam, Spirent Communications, Greene King and RPC.Technology firm Smiths Group was pressured lower after Bank of America downgraded its rating on the shares from 'neutral' to 'underperform'.??Currency headwinds were a problem for South African insurance group Old Mutual in the first half of 2012, as were falling interest rates, which hit investment returns, causing shares to fall. ??Aquarius Platinum was in the red after the firm swung to a pre-tax loss of $189m in the 12 months to June 30th, versus a profit of $25.4m the year before, while revenue slumped 29% to $485.4m. FTSE 100 - RisersStandard Chartered (STAN) 1,315.50p +7.08%Rio Tinto (RIO) 3,220.00p +2.86%Croda International (CRDA) 2,451.00p +2.60%Fresnillo (FRES) 1,565.00p +2.29%Xstrata (XTA) 912.50p +1.74%Randgold Resources Ltd. (RRS) 6,190.00p +1.73%Prudential (PRU) 804.50p +1.51%Aviva (AV.) 318.20p +1.34%Babcock International Group (BAB) 898.50p +1.24%Evraz (EVR) 280.00p +1.12%FTSE 100 - FallersSmiths Group (SMIN) 1,075.00p -3.41%Pennon Group (PNN) 730.00p -3.12%ICAP (IAP) 327.80p -2.50%InterContinental Hotels Group (IHG) 1,683.00p -2.43%AstraZeneca (AZN) 3,015.00p -2.21%Serco Group (SRP) 579.00p -2.20%International Consolidated Airlines Group SA (CDI) (IAG) 153.30p -2.11%Vedanta Resources (VED) 986.00p -2.09%GKN (GKN) 215.70p -1.69%SABMiller (SAB) 2,832.50p -1.25%FTSE 250 - RisersHeritage Oil (HOIL) 177.00p +18.95%Daejan Holdings (DJAN) 3,191.00p +3.10%BBA Aviation (BBA) 183.00p +2.81%Melrose (MRO) 235.00p +2.40%Ferrexpo (FXPO) 197.20p +2.28%Computacenter (CCC) 377.00p +1.89%AZ Electronic Materials SA (DI) (AZEM) 299.50p +1.87%Fidessa Group (FDSA) 1,434.00p +1.85%Redrow (RDW) 134.90p +1.81%FirstGroup (FGP) 245.00p +1.74%FTSE 250 - FallersCobham (COB) 225.70p -5.37%Greene King (GNK) 567.50p -5.18%Cairn Energy (CNE) 296.50p -4.17%Hikma Pharmaceuticals (HIK) 711.00p -4.05%Bwin.party Digital Entertainment (BPTY) 93.20p -4.02%Petra Diamonds Ltd.(DI) (PDL) 110.00p -4.01%Talvivaara Mining Company (TALV) 148.40p -3.76%Rank Group (RNK) 120.00p -3.15%International Personal Finance (IPF) 295.40p -2.99%Perform Group (PER) 367.70p -2.96%BC