FTSE on the rise after turbulent week
Investors went in search of cheap-looking stocks today as the London market regained some confidence at the end of a turbulent week.
The FTSE 100 Index closed 1.7% higher, up 106.8 points at 6262.1, with 14 blue-chip stocks managing gains of 5% or more.
Mining stocks and housebuilders were the main beneficiaries, putting back a slice of the heavy declines seen in recent sessions.
Credit crunch fears on Wall Street have undermined the top flight this week, but Thursday’s Thanksgiving holiday broke the gloom as traders returned for a shortened session in upbeat mood today.
Takeover target Rio Tinto set the pace in the top flight, up 390p to 5315p, while fellow mining company Vedanta Resources rose more than 7%, or 136p to 2036p amid talk of a possible bid from Chinese investors.
An HSBC upgrade for peer Anglo American lifted the stock 6%, or 171p, to 2980p in a strong session for the sector.
Housebuilders also gathered strength despite data showing mortgage approvals at a record low in October.
The sector has been hit hard by recent financial turbulence and rate rises, but Taylor Wimpey cheered 14.2p to 196.2p, Persimmon gained 40p to 794p and Barratt Developments was 24.75p up at 484.25p.
Meanwhile more bid speculation – this time among insurers – centred on a report that France’s Axa could be interested in bidding for rival insurance group CNP.
Attention focused on Friends Provident, seen as a target after it recently failed to complete a merger with closed life fund Resolution.
Friends rose 6.1p to 154.7p, while Prudential added 32.5p to 660p and Aviva gained 34p to 670.75p. Elsewhere in the financial sector, Barclays lifted 16.75p to 510.5p and Royal Bank of Scotland added 18.75p to 421p.
Northern Rock also recovered from a poor start, after a newspaper raised fresh doubts about the company’s ability to repay the £24 billion of taxpayers’ money loaned from the Bank of England. The crisis-hit lender was the Footsie’s leading faller for a while, but closed 2% higher, up 1.8p at 85.9p.
In the FTSE 250 another mortgage lender with financing problems, Paragon, had a better session.
The company rose almost 31%, or 28p, to 117.5p after heavy falls when funding uncertainties came to light earlier this week. Investors returned to the stock after an upgrade from KBC Peel Hunt.
It was chased higher by waste management group Biffa, which stood rose 25% after it emerged it had rejected a takeover approach from Montagu Private Equity and Hg Pooled Management. The proposal was tabled in September, but the bidders said they had not decided whether to make another approach.
The biggest Footsie risers were Rio Tinto up 390p at 5315p, Taylor Wimpey ahead 14.2p at 196.2p, DSG International up 8.1p at 113.2p and Mitchells & Butlers ahead 43p at 641p.
The biggest fallers were Centrica down 7.75p at 347.75p, Royal Dutch Shell off 30p at 1981p, International Power down 6.5p at 468.75p and Cable & Wireless off 2.2p at 181.5p.
