Footsie back in the black
The FTSE 100 Index regained its composure today as investors sent chemicals giant ICI to levels not seen for five years.
ICI shares jumped 7% as the markets cheered signs of a further recovery in its performance and plans for more cost savings once a current round of restructuring is completed next year.
It helped the Footsie recover some of yesterday’s heavy losses of more than 70 points as it moved 26.9 points higher to 6036.9.
ICI topped the risers board with gains of 24.75p to 394.75p on a day when it said it was to cut another 2,300 jobs from its workforce over the next five years.
Shares in Royal Dutch Shell were also on the front foo – up 3p to 1951p - after it beat expectations for its profits between January and March and revealed that it was now in a position to spend more than the 5 billion US dollars it had earmarked to buy back shares this year.
The rest of the sector followed, although the scale of the gains had been higher earlier in the session. BP eventually settled 4p higher at 681p while BG Group was 10.5p ahead at 756p.
InterContinental Hotels was another strong riser – up 6% or 55.5p to 1000.5p, its highest level ever – amid speculation of a private equity-led takeover bid.
Miners did their best to prop up the top flight with Xstrata ahead 117p at 2147p, Rio Tinto up 120p at 3190p and Kazakhmys 45p stronger at 1194.5p.
Elsewhere in the Footsie, Rentokil Initial shares ticked 3.75p higher to 157.75p as the services group signalled that efforts to revive its fortunes were showing signs of reward. That was despite another fall in quarterly profits.
But Unilever was on the slide – off 15.5p to 560.5p – as investors who hoped for a rebound in sales in Western Europe exited the stock. Underlying sales in its heartland were down 0.5%.
There was also pressure on AstraZeneca shares, down 21p at 2953p, after the pharmaceuticals company said it would stop development of diabetes drug Galida.
Elsewhere, Debenhams shares were priced at the bottom end of expectations today as the retailer returned to the market after an absence of more than two years. Debenhams began trading at 195p before moving up to close at 200.25p.
Bar and restaurant operator Mitchells & Butlers fell 4% or 22p to 494p as hopes of a successful takeover receded after it rejected a £2.8 billion proposal from tycoon Robert Tchenguiz.
Another FTSE 250 Index stock, music group EMI, fared better as shares recovered some of the losses seen yesterday after the latest takeover snub from US-based rival Warner Music. EMI rose 4% or 11.25p to 281.75p.
The day’s biggest blue chip risers were ICI up 24.75p to 394.75p, Intercontinental Hotels 55.5p stronger at 1000.5p, Xstrata up 117p to 2147p, and Kazakhmys 45p higher to 1194.5p.
The heaviest fallers were Unilever off 15.5p to 560.5p, Smith & Nephew down 12p to 438p, PartyGaming 3p lower to 145p and Shire down 125p to 837.5p.
