Britain's leading share index scaled a new 44-month closing peak on Monday, led by Standard Chartered after the Asia-focused bank reported forecast-beating results, while oil firms BP and Shell lent backbone as they tracked another record high for crude prices.
The FTSE-250 Mid-Cap index also hit an all-time high, reaching 7,708.1 points earlier, despite four stocks falling as dealers reported talk that investment banks were placing shares in builder George Wimpy, engineer Bodycote, ports operator AB Ports and banknote printer De La Rue.
The FTSE 100 index closed up 29.6 points, at 0.6 percent, at 5,344.3 - its highest level since December 2001.
But turnover, albeit swollen by the rash of placings, was thin, reflecting lower trading activity during the summer.
Tim Rees, director of investment strategy at Insight Management, said there was an element of confidence in the market despite sky high oil prices.
"The results season has been good, there have been dividend increases and you have a bit of M&A. The market maybe starting to make its mind up about what it thinks of economic growth and reassessing its opinion on that," he said.
"You look at the oil price and you worry about it - maybe the market's being a bit overly confident - but at the moment it isn't enough to derail it."
Gains in the oil sector added about 14 points to the blue chip index as BP led the sector with a 1.9 percent advance.
Banks lent just over 5 points of upside to the FTSE 100, with Standard Chartered accounting for much of that gain after it beat expectations with a 20 percent jump in interim profits and gave a rosy outlook for the rest of the year.
Dealers added that vague take-over speculation also supported the stock, which closed up 7.6 percent at 1,211 pence.
Elsewhere in the sector Barclays rose 1 percent after Deutsche upgraded the stock to "buy".
Shares in four second-tier stocks fell as investors in the UK mid-caps took advantage of buoyant stock market conditions to place stakes totalling 91 million pounds in quick-fire placings by three institutions.
Dealers said Morgan Stanley was selling 9.6 million shares in AB Ports at 460p each and 16.1 million shares in George Wimpey at 412p.
And they said Citigroup was placing 4.2 million De La Rue shares at 369p and that Dresdner Kleinwort Wasserstein was selling 16 million Bodycote shares at 198p each.
Shares in all four stocks shed between about 2 and 4 percent in value.
The FTSE 250 index gainers were dominated by Marconi, which surged 14.7 percent as the telecoms equipment maker said it was in early talks that could lead to a take-over offer. A press report suggested its Chinese partner, Huawei Technologies, could be the interested party.
Back among blue chip stocks, shares in Royal Bank of Scotland led the fallers' list with a 1.6 percent dip as investors continued to register concern over margins following last week's results and as Lehman Brothers downgraded its opinion on the stock.
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