Heavyweight banks, such as Royal Bank of Scotland and Barclays helped to push Britain's top share index to its best closing level in 3 weeks on Wednesday, while the broader market was boosted by falling oil prices as fears over a corporate profit and consumer spending squeeze were lifted. Elsewhere among financials Anglo-US fund manager Amvescap led the blue chip gainers, rising 5.4 percent, as investors cheered a push by global stock markets towards multi-year highs and slight gains in the dollar.
The London-listed fund manager earns the bulk of its revenues in the United States and is widely seen as a highly geared play on any equity market recovery.
The FTSE-100 share index closed up 44.4 points, or 0.9 percent, at 4,777.4 after hitting 4,783.7, its highest level since late November and leaving the benchmark on a three-day winning streak.
Dealers said Wall Street's rally, where the Dow Jones was trading at 3-1/2-year highs, combined with lower oil prices and dovish Bank of England Monetary Policy Committee meeting minutes - hinting at a future cut in UK interest rates - boosted the market. Although the rise was broad-based, banks accounted for around a third of the benchmark index's rise, helped by the prospect of lower interest rates. Barclays, Lloyds TSB, and RBS each added more than 1 percent each.
"First we had the rally on Wall Street, then the dovish MPC minutes, then the fall in oil," said a dealer. "That combination has really helped stocks move."
But shares in oil companies eased off earlier highs, with Shell closing up 1.3 percent at 438-3/4p, off an earlier high at 442-1/2p, while BP reversed by a bigger margin, ending up 0.5 percent better at 508-1/2p, some 9p off an earlier peak.
Shell's fall was tempered by an upgrade to earnings estimates by influential stockbroker Cazenove, dealers said.
"Although this is weighing on the petrochemicals sector, there's little doubt that high oil prices have the potential to damage global economic growth as we move into the New Year, making today's news especially welcome," said Geoff Langham, head of trading at CMC Group.
Shares in mid-cap radio companies Capital and GWR raced to six-week highs after their proposed merger was effectively cleared with only a few minor conditions by the Office of Fair Trade. Shares in both firms added about 5 percent.
"This comes as a positive surprise as we thought a referral was a near certainty," said analysts at brokerage Numis. "We originally estimated the deal completing in September 2005. We expect this now to be bought forward to around March 2005. Obviously the sooner the deal is completed, the greater the scope for upgrades as revenue synergies and cost savings will be bought forward.
But among blue chip media stocks publisher and rival radio station group Emap slipped 1.3 percent, with dealers citing possible increased competition in the sector as Capital and GWR merge. Numis analysts also said it brought an expected bid by Emap for Scottish Radio Holdings closer.
Elsewhere in the media sector shares in global news and information firm Reuters, which provides terminals to the financial sector, were the FTSE 100's second biggest gainers, up 2.9 percent at 379p. Dealers said a batch of positive results from US investment banks, including Morgan Stanley and Bear Stearns had boosted sentiment in the stock.
Among the clutch of blue chip fallers United Utilities stood out, shedding 2.1 percent as it traded without the right to its latest dividend.
But back among mid-caps Geest added 2.8 percent to 632p after the convenience food maker said it agreed to open its books to Icelandic rival Bakkavor for a potential take-over bid worth about 486 million pounds, or 655p a share.
Comments
Comments are closed.