Footsie hits four-year high

Signs that retailers enjoyed a better-than-expected Christmas season helped push the FTSE 100 Index to a fresh four-year high today.

While volumes were light in the first session after the festive break, the Footsie still managed to close 27.4 points stronger at 5622.8.

Marks & Spencer and B&Q owner Kingfisher were the main beneficiaries of the positive sentiment in the retail sector, which followed strong sales figures from retail partnership John Lewis.

Utility and commodity stocks also rose, although analysts wondered whether the market would now fall victim to profit-taking ahead of the new year.

Geoff Langham, head of trading at CMC Markets, said: “There’s been little on the economic or corporate calendars, although positive notes from researchers covering the retail sector and higher metals prices buoying the miners have both brought some cheer to the index.”

Among the retailers, M&S advanced to a new seven year high, up 5.75p to 504.25p and a level unthinkable a year ago when the stock languished at 341p.

Other high street operators to make progress included Kingfisher, which added 3p to 240.5p and second-tier Matalan, up 5.25p to 183.5p. Next, which earlier set the pace in the top flight, closed just a penny higher at 1545p.

Top flight utilities injected some momentum, with National Grid rising 6.5p to 570p, Severn Trent up 20p at 1086p and United Utilities adding 10p to 682p.

Cadbury Schweppes was in the black after announcing it had sold its US-based Holland House cooking wines business for around £21 million. The stock cheered 12p to 554.5p.

Pharmaceuticals giant AstraZeneca also drew a positive response after striking another deal in a bid to boost its pipeline of new drugs. On this occasion it signed a research and licensing agreement with US-based Targacept, lifting shares by 36p to 2831p, a gain of more than 1%.

Oil stocks were in negative territory for much of the session but closed near to their opening mark with BP off half a penny at 621p and Royal Dutch Shell 6p higher at 1864p.

Blue-chip housebuilder Persimmon was off colour despite property website Hometrack saying that house prices rose for the first time in 18 months during December.

The stock weakened 22p to 1253p to make it the day’s heaviest top flight faller, while profit-taking after a strong year was also blamed in the FTSE 250 Index as McCarthy & Stone lost 17.5p to 640.5p, George Wimpey dropped 9.25p to 478p and Taylor Woodrow weakened 7.25p to 372p.

Leisure group Rank rose 1%, up 3.5p to 315.25p after reaching agreement to sell its Deluxe film arm to an American investment firm. The owner of the Mecca bingo and Hard Rock Cafe chains said the £430 million sale to MacAndrews & Forbes Holdings would help it to concentrate on its core business areas.

The biggest Footsie risers were Alliance UniChem up 21.5p at 807p, Kazakhmys ahead 16.5p at 760p, Cadbury Schweppes up 12p at 554.5p and Reuters ahead 8.75p at 431p.

The biggest fallers were Persimmon down 22p at 1253p, BT Group off 2.5p at 222.25p, Antofagasta down 17p at 1836p, PartyGaming off 1.25p at 136p.

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