Energy and mining stocks help FTSE surge
The FTSE 100 Index closed at a new 28-month high today after heavyweight energy and mining stocks surged on the back of record oil prices.
With investors continuing to commit money at the start of the fourth quarter, the Footsie built on recent gains to finish 25.3 points higher at 4707.1.
At one point, the top flight index gained 33 points but eased back in the wake of a sluggish opening to trading in New York.
The prospect of interest rates remaining on hold later this week added to the confident mood, although the main reason for London’s improvement was down to the impact of oil prices on the likes of Shell and BP.
Post-hurricane supply disruptions in the Gulf of Mexico pushed the cost of crude to around 51 US dollars a barrel in New York and further raised profits hopes at BP – up 14.5p at 549p – and at Shell, which gained 6.25p at 418.25p.
Miners also benefited from the rise in commodity prices with BHP Billiton up 12.5p at 598p, RioTinto 20p stronger at 1520p and Antofagasta up 12p at 1132p.
On the downside of the oil price rise, industry groups such as British Airways - off 6.75p at 209.75p – fell because of worries over higher overheads.
Barclays was the biggest winner among the banks, advancing 6.5p to 562.5p, while Royal Bank of Scotland rose 17p to 1654p and Northern Rock added 6.5p to 757p.
But hedge fund specialist Man Group led the way, up 4% or 47p to 1296p as speculation over a takeover bid from the United States continued to circulate.
On a slow day for corporate news in London, ailing retailer Marks & Spencer announced the completion of a key step in its turnaround strategy.
The group said it had paid £125 million for the per una clothing brand, which was formed as a joint venture between M&S and former Next boss George Davies. M&S shares gained 1.5p to 346.5p.
Also in the retail sector, Sainsbury’s slipped as investors reacted to news that finance director Roger Matthews was planning to step down next year. Shares fell 4p to 255.25p.
Outside the top flight, Manchester United shares lost some of the strength seen yesterday in the wake of yesterday’s takeover approach, which is thought to have come from sports tycoon Malcolm Glazer. The FTSE 250 Index stock closed 3.75p lower at 267.25p.
And music promoter Mean Fiddler saw its shares slump 22%, or 12p to 41.5p, after shocking investors by ousting its new chief executive and saying a newly-appointed chairman would not be joining the board.
Meanwhile, shares in online travel group ebookers took a tumble, down 7% or 17.25p to 210p, after the US owner of rival Expedia, InterActiveCorp, ruled out an immediate bid for the business.
The biggest Footsie risers were Man Group up 47p at 1296p, Sage Group ahead 5p at 172p, BP up 14.5p at 549p and BHP Billiton ahead 12.5p at 598p.
The biggest fallers were ITV down 3.5p at 106.5p, British Airways off 6.75p at 209.75p, BAE Systems down 5.5p at 233p, and British Land off 13p at 731.5p.
