FTSE bounces back
The London market bounced back into life today as the FTSE 100 Index put its recent heavy losses behind it.
Strong results from insurer Royal & Sun Alliance and speculation linking drugs company AstraZeneca to a possible bid from Swiss rival Novartis helped lift the mood in London.
Early gains by the Dow Jones Industrial Average on Wall Street added to the excitement as the Footsie closed 43 points higher at 5855.9.
It followed two days of selling which saw the index sink from near five-year highs of more than 5900 towards the 5800 mark.
The progress came even though Tesco slipped 1% as it emerged that the Office of Fair Trading was considering a full scale inquiry into the grocery sector.
Tesco bore the brunt of the OFT’s proposed referral to the Competition Commission, with its shares 3p lower at 329p. The impact on rivals supermarkets was less dramatic, with Sainsbury up 2p to 319.5p and Morrisons up 2.75p to 207p.
Among other developments, Build Center owner Wolseley jumped 4% after announcing four further acquisitions worth £63m (€92m) and taking its total spending to £571m (€831m) since August. Wolseley shares were up 50p to 1411p.
Investors welcomed R&SA’s annual results which delivered profits well above City expectations. Shares in the stock cheered 2% or 2p to 127.5p as the insurer unveiled a surplus of £698m (€1.01bn) and said it was making progress in “de-risking” its US business.
Other finance stocks followed suit, with Prudential moving 6.5p higher to 582.5p and Legal & General gaining 2.5p to 127.5p.
The mining sector also staged a come-back after weaker metal prices and a heavy bout of profit-taking saw it suffer earlier in the week.
Kazakhmys was the main beneficiary, up 36.5p at 861.5p. The 4% rise sent it to the top of the top flight leaders board, while Rio Tinto added 35p to 2623p.
Oil stocks BP and Royal Dutch Shell added further buoyancy with gains of 2.5p to 636.5p and a penny to 1834p respectively.
And British Airways was on the risers board as it met investors to discuss plans for £450m (€655m) of cost savings in the next two years and said its fuel bill for 2006-07 would rise £400m (€582m) to £2bn (€2.9bn). Shares were up 12p to 328.75p.
But airports operator BAA fell 7% or 55.5p to 775p on whispers that Spanish infrastructure firm Ferrovial was no longer interested in tabling a bid.
Elsewhere, Lookers shares were up 11% or 67p to 677p after rival car dealer Pendragon tabled a hostile bid of £258.8m (€377m).
Among second-tier companies reporting results, National Express gained 57.5p to 928.5p after beating expectations with a profits rise of 14.6% to £89.3m (€130m). It was optimistic about prospects, particularly for its coach operation.
The day’s biggest blue chip risers were Kazakhmys up 36.5p to 861.5p, AstraZeneca up 118p to 2832p, British Airways 12p higher at 328.75p and Wolseley up 50p to 1411p.
The heaviest fallers were BAA down 55.5p to 775p, Severn Trent off 15p to 1117p, Anglo American 18p lower to 1972p and Tesco down 3p to 329p.
