Decent gains for FTSE

The FTSE 100 Index enjoyed its second straight day of gains today as City dealing rooms got into the Christmas spirit.

The FTSE 100 Index enjoyed its second straight day of gains today as City dealing rooms got into the Christmas spirit.

The blue-chip benchmark came within 50 points of its November year-high during the session, although US GDP figures showing a worse than expected performance for the world's largest economy during the third quarter of 2009 took some of the shine off the 'Santa rally'.

The London market eventually finished 34.7 points ahead at 5328.7 as traders also digested the best US homes sales in three years.

Tim Hughes, head of sales trading at IG Index, said: "Many will be reflecting that suddenly the world seems a lot brighter place, especially when compared with the gloom of a year ago."

The pound fared less well after disappointing official figures showed UK output contracted by 0.2% in the third quarter, weaker than the 0.1% decline or flat performance predicted by analysts.

The prospect of interest rates remaining lower for longer saw the pound dip below $1.60 and €1.12 at one point.

But oil stocks continued their solid run as oil cartel OPEC elected to keep production unchanged in 2010 as expected, while market heavyweights GlaxoSmithKline and AstraZeneca were also in demand.

Royal Dutch Shell lifted 40.5p to 1807.5p and BP added 6.4p to 597.5p despite crude prices easing slightly on a better day for the dollar.

Among pharmaceutical firms, Glaxo added almost 2% or 25p to 1326p and AstraZeneca cheered 52p to 2889p.

Other stocks to benefit from the pre-Christmas rally included Marks & Spencer, which added 4.5p to 402.6p, and insurers Aviva and RSA Insurance - up 4.8p to 389.5p and 1.5p to 119.9p respectively.

The London Stock Exchange was also among the Footsie's leading risers, up 13p to 719p after even stronger gains earlier as investors mulled yesterday's deal to buy 60% of smaller rival Turquoise.

Citi brokers said the deal could have long-term benefits but was unlikely to ease competition significantly and maintained a sell rating on the firm.

British Airways however was among the top flight's leading casualties - down 3.9p to 189.1p - as investors wondered over the impact of severe weather disruption on Christmas travel just days after it averted a devastating strike.

The FTSE 250 Index saw strong gains in the housebuilding sector after Goldman Sachs changed its recommendation on Taylor Wimpey and Barratt Developments to buy from neutral. Shares in Taylor lifted 1.36p to 35.7p and Barratt added 1.9p to 115.9p.

In a quiet session for corporate news, 888 Holdings shed 0.7p to 110.8p after it announced plans to buy internet rival Wink Bingo for up to around £60m (€67.17m).

The biggest Footsie risers were Cairn Energy up 20.2p at 339p, Royal Dutch Shell 40.5p higher at 1807.5p, Unilever up 40p at 1990p and Glaxo 25p higher at 1326p.

The biggest fallers were Fresnillo down 29p at 751,5p, Royal Bank of Scotland off 0.88p at 28.93p, BA down 3.9p at 189.1p and Kazakhmys which finished 15p down at 1246p.

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