BLUE-CHIP RALLY FUELLED BY OIL AND COMMODITY STOCKS
By Richard Brennan for express.co.uk
THE LONDON market posted gains of almost 2% today as oil and commodity stocks fuelled a blue-chip rally.
A fresh all-time high above 7184p a barrel for oil helped petrochemical firms, while takeover manoeuvres among mining and telecoms firms also added impetus.
After a week when the FTSE 100 Index lost 1.6 per cent, the top flight finished 96 points ahead at 5625.9 as a positive start on Wall Street consolidated early advances.
Oil and gas heavyweights featured strongly among the Footsie risers after oil prices reached a new record of 143.67 US dollars a barrel on the back of Middle East tensions. BP rose more than 3 per cent, or 18p, to 583.25, while Royal Dutch Shell was 58p higher at 2020p.
Other gainers on the high prices included oil and gas services firm Wood, which cheered 24.75p to 494.5p.
Takeover talk in the mining and telecoms sectors also offered support. Speculation that steel giant Lakshmi Mittal could make a move for Rio Tinto helped boost shares nearly 3 per cent, or 166p, to 6009p.
Meanwhile Anglo American - said to be eyeing both BHP Billiton and Rio’s assets if a merger of the two goes ahead and forces disposals - gained 130p to 3526p.
Investors also cheered news of a takeover in the telecoms sector, with Cable & Wireless tabling a higher £329 million offer for smaller rival Thus.
Thus’ board said the offer was “not such a compelling proposal” that it should recommend the bid to shareholders, but its shares soared 22 per cent, or 31.75p to 177p, while C&W shares rose 3.4p to 150.8p.
C&W’s rival, mobile phone giant Vodafone, also enjoyed a positive session after revealing a music tie-up with social networking site MySpace. This helped the shares advance more than 5%, or 7.45p to 149.15p.
ITV was the top flight’s worst performer, however, after downbeat comments on prospects for media companies from Deutsche Bank, which cut the broadcaster’s target price.
News that the launch of its Kangaroo video-on-demand service joint venture with Channel 4 and the BBC would be delayed by a competition referral also sent ITV 6 per cent or 2.8p lower to 44.7p.
In the FTSE 250, profit warnings rocked several firms. Southern Cross - the UK’s biggest care home operator - saw shares lose nearly two thirds of their value after warning over profits. Shares plunged 58 per cent or 183p to 130p.
Daily Mirror and Sunday Mirror publisher Trinity Mirror also suffered a share blow after a profit warning. It said full year operating profits were set to come in around 10 per cent less than market expectations, sending shares down 28 per cent, or 42.5p to 109p.Housebuilder Taylor Wimpey was down for much of the day after write-downs on its land banks and work in progress totalling £660 million, but finished unchanged at 62p.
The biggest Footsie risers were Cobham up 11.4p at 197.8p, Wood ahead 24.75p at 494.5p, Vodafone up 7.45p at 149.15p and BG Group ahead 56p at 1307p.
The biggest Footsie fallers were ITV down 2.8p at 44.7p, Friends Provident off 3.8p at 102.2p, London Stock Exchange off 25.5p at 780p and Wolseley down 11.5p at 376.5p.
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