FTSE reaches four-month high
Fears of an interest rate hike in the US failed to stop the London market from reaching a four-month high today as blue-chips were buoyed by some positive trading updates.
Better than expected results for InterContinental Hotels and British American Tobacco helped ease investor nerves despite rumours the Federal Reserve may raise interest rates to curb inflation.
The talk – and more downbeat housing data – triggered early falls on Wall Street, but it was not enough to dent the FTSE 100 Index, which closed 45.8 points higher at 6261. It was the top-flight index’s highest close since January 9.
Sentiment was helped by a set of upbeat first quarter results and the impact of high oil prices on energy firms including BP, as well as faint hopes of a UK interest rate cut tomorrow after worse than expected manufacturing figures.
Cigarette companies Imperial Tobacco and British American Tobacco were on the front foot after BAT said it had made a “great start” to the year with first quarter profits up 18%. The firm rose 56p to 1994p, while Imperial added 25p to 2463p.
Holiday Inn group Intercontinental Hotels added 26.5p to 852p after underlying pre-tax profits rose to £47m (€59.6m) from £40m (€51m).
The star performer was pub group Enterprise Inns, which soared nearly 30% after announcing it was eligible to convert to a Real Estate Investment Trust (REIT), benefiting shareholders. Shares were up 115.25p to 510p, with rival operator Punch Taverns adding more than 11%, or 60.5p, to 600p.
Investors also picked out housebuilders after recent falls, leaving construction firm Persimmon near the top of the Footsie risers board with a gain of 32p to 620.5p, while second-tier rivals Barratt Developments and Taylor Wimpey added 15p and 5.25p to 282.5p and 134.25p respectively.
Building supplies firm Wolseley was also cheered, adding 33.5p to 572p, with Homebase owner Home Retail Group up 13.25p to 268p.
Directories firm Yell was a big riser in the FTSE 250 Index after analysts used reassuring first quarter figures from US rivals as a basis for forecasting the performance of the Yellow Pages publisher. Shares jumped 13.5p to 189.25p.
With oil prices now established above 120 US dollars a barrel, Footsie-listed prospector Cairn Energy lifted 110p to 3333p and BP added 8p to 618p.
Elsewhere, gaming group Rank slipped 5% after reporting continued pressure on its Mecca bingo arm. The group said a 14% like-for-like revenue fall represented a modest improvement on the end of last year, but this failed to reassure investors as shares fell 5.25p to 89p.
Frankie & Benny’s operator Restaurant Group jumped 15%, or 22p to 169p, after it said sales growth accelerated in recent weeks.
The Footsie’s four biggest risers were Enterprise Inns, up 115.25p to 510p, Wolseley up 33.5p to 572p, Persimmon up 32p to 620.5p, and Home Retail Group which closed up 13.25p to 268p.
The four biggest fallers were Antofagasta, down 34.5p to 767.5p, Old Mutual down 4.8p to 126.2p, Rexam down 15.75p to 464p and Liberty International which ended the day 30.5p off at 942.5p.
