Strong gains in the telecom and finance sectors helped lift the London market today as blue-chip shares raced ahead.
As expected, Wall Street opened slightly lower as investors took profits after last night’s 5% hike on the Dow Jones Industrial Average.
An earnings warning from US group Dow Chemical also subdued the mood.
But although the FTSE 100 Index was unable to hold an early 128-point surge, trading remained strong throughout the session.
It meant the top flight was able to break past the 3900 mark and close up 107.8 points at 3905.2, its second consecutive upbeat finish.
City Index trader Tom Hougaard called today’s gains “encouraging”.
He added: “We are only a stone’s throw away from 4000 and if the Dow can make it back into positive territory, this could happen before the end of the week.”
Telecoms were some of the biggest gainers today.
The sector took a pounding earlier this week when the FTSE 100 tumbled and about £44bn was stripped off the value of shares.
Today, however, mobile phone giant Vodafone put on 6p at 90p, rival mmO2 added 2.75p at 47p, BT gained 4.5p at 173.25p and Cable & Wireless was 3.75p heavier at 128.75p.
The banking sector also helped keep the market ahead, gaining on speculation the US Federal Reserve may be gearing up to cut interest rates.
Royal Bank of Scotland shot forward 67p to £13.02, Barclays rose 18.75p to 416.25p, HBOS added 8p at 628.5p and HSBC climbed 11p to 662p.
Among the insurers, Aviva was up 20.5p to 393.5p, Legal & General was ahead 6p at 93p while Royal & Sun Alliance added 4.75p at 101.75p.
The sector has suffered recently as investors fretted over solvency in falling equity markets.
Even oil giant BP was able to move ahead, up 7p at 442.5p, despite cutting production forecasts.
Output was blown off course by last month’s Isidore storm in the Gulf of Mexico and third-quarter production growth is expected to drop to 4% – below previous forecasts of 5%.
Retailing stocks were also on the slide after a survey showed the high street boom was cooling despite a pick-up in sales in September.
Marks & Spencer fell 10.75p to 312p, Dixons was down 6p at 168p, Next fell 48.5p at 880p and B&Q-to-Comet firm Kingfisher was off 7p at 201.75p.
Outside the top flight, chip designer and former FTSE 100 stock ARM Holdings highlighted the uncertain economic climate with a shock profits warning.
Shares dived 63%, down 79.5p to 47.75p, after ARM slashed forecasts and said it did not expect any significant upturn in business until next year.
At the height of the tech boom, ARM’s shares were worth nearly £10.
Back in the FTSE 100, the biggest risers were Vodafone, up 6p at 90p, Legal & General, up 6p at 93p, AstraZeneca, up 130p at £21.30 and mmO2, up 2.75p at 47p.
The heaviest fallers were Next, off 48.5p at 880p, Scottish & Newcastle, off 21p at 525p, Dixons, off 6p at 168p and Kingfisher, off 7p at 201.75p.
EGi News 02/10/02
