Tokyo brings some sparkle to FTSE

A five-year high for Tokyo’s Nikkei index brought some sparkle to trading in London today as shares continued to push away from the 5600 barrier.

The jump of almost 1% in Japan reflected hopes for an increase in consumer spending – a sentiment shared in the UK after optimism over Christmas trading lifted the FTSE 100 Index to a fresh four-year high yesterday.

A range of sectors were in positive territory today, prompting the Footsie to reach mid-morning 18.1 points higher at 5640.9.

Among the highlights, Marks & Spencer added another 1% or 5p to reach a new seven-year high of 509.25p.

Housebuilders were also on the front foot after losing ground yesterday. Persimmon led the charge in the top flight, up 27p at 1280p, while second tier rivals Bovis and Taylor Woodrow were ahead 26.5p and 10p to 802.5p and 382p respectively.

Elsewhere, investors were buying into Hilton Group ahead of the expected completion of the £3.6 billion deal to sell its hotels to US-based cousin Hilton Hotel Corporation. Shares jumped 6.25p to 370.75p while the prospect of further consolidation in the sector caused rival InterContinental Hotels to improve 8.5p to 844p, a gain of around 1%.

Miners played their part in lifting the Footsie, with Xstrata up 24p at 1364p, BHP Billiton 15p stronger at 950p and Rio Tinto ahead by 35p at 2675p.

Analysts said continued demand for commodities such as gold and copper meant prices were still surging, in turn adding around four points to the value of the Footsie.

Dean Castles, trader at CMC Markets, said two days of steep gains after the Christmas break had led many clients to book profits.

However, he added: “The willingness of some to hold long positions is also evident as traders feel the boom in the Chinese economy will last well into 2006 so further growth in the sector is likely.”

As well as Marks & Spencer, a number of other retail stocks featured on the Footsie risers board. They included Morrisons, up 1.5p at 195.75p and Sainsbury’s, ahead 2.5p at 323p.

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