Footsie stages recovery
The London market rallied today as the FTSE 100 Index recovered much of the ground it lost in yesterday’s heavy sell-off.
Energy stocks dragged the top flight back towards the 5500 mark after a rise in oil prices in the United States last night.
Early gains on Wall Street added to the positive mood as the Footsie rose 62.9 points to close at 5486.1.
Shares in BG Group were up 3% as it led the recovery among energy stocks to stand 14.5p up at 555p after crude prices rose above 57 US dollars again.
It was followed north by rival Cairn Energy – 39p ahead at 1869p – and oil heavyweights BP and Royal Dutch Shell, which were up 15.5p to 649.5p and 22p to 1887p respectively.
The gains followed a sell-off in the wake of lower oil prices earlier in the week.
Mining stocks were also in buoyant mood after Rio Tinto moved to increase its stake in Ashton Mining of Canada. Shares in Rio Tinto rose 62p to 2402p, while rival Xstrata was up 36p to 1350p.
Man Group was the day’s biggest riser after it agreed a settlement over a technology patent infringement lawsuit with Trading Technologies. Shares in Man were up 70p to 1845p.
The positive sentiment had a knock-on effect on the wider market, as banking and insurance stocks also recovered from yesterday’s losses.
A positive trading statement from HSBC helped its share price jump 10.5p to 936.5p as analysts breathed a sigh of relief that the banking giant had avoided the disappointment of Barclays earlier in the week.
HSBC posted third quarter pre-tax profits ahead of last year in all parts of the business, while the trading update also helped to steady the nerves of investors who had flinched at higher costs and bad debts.
The boost dragged shares in Barclays higher – up 8.5p to 599p – while Royal Bank of Scotland and Northern Rock were also ahead by 26p and 10.5p to 1676p and 843.5p respectively.
Royal & SunAlliance was among the biggest movers, up 4% or 4p to 117.5p. Friends Provident followed to close 3.5p up at 194.25p and Norwich Union owner Aviva was 6p better off at 692.5p.
But Prudential bucked the trend after its offer to buy out fellow investors in online bank Egg failed to impress the market. Shares slipped 2.5p to 525p as shareholders saw their hopes of a return of cash from any sale of Egg disappear, making the insurer one of the session’s heaviest fallers.
Major movers outside the top flight included Egg, up 14% or 14.25p to 116.75p, as its shares reflected the premium that the Pru is willing to pay for total control.
The day’s biggest blue-chip risers were Man Group up 70p to 1845p, Royal & SunAlliance up 4p to 117.5p, Next up 38p to 1423p and Xstrata ahead 36p to 1350p.
The heaviest fallers were PartyGaming off 3.25p to 114.25p, Scottish & Southern Energy down 9p to 972p, Kingfisher down 2p to 223p and Daily Mail & General Trust down 6p to 744.5p.
