A late rally powered the FTSE 100 Index to its highest close for a month today, after another bumpy ride for investors in the City.
Heavyweight blue-chip stocks surged back into positive territory after markets on Wall Street fuelled a dramatic reversal in fortunes.
The Dow Jones Industrial Average slipped by 135 points in early trading in the US but recovered to stand 15 points ahead by the close in London.
And the FTSE, down by as much as 50 points in the morning, raced ahead to end up 81.9 points at 4,322.4 – its best close since 10 July.
Analysts said the rally had come despite a spate of profit taking and showed confidence was on the mend after the recent volatility.
Investors even brushed aside news that fallen US telecom giant WorldCom had uncovered $3.3bn (£2.15bn) more in bogus accounting.
And today’s gains mean the FTSE put on 6% in the past week as it continues to climb back up from its 3,777.10 low last month.
Peter Cogliatti of Williams de Broe said: “People were looking to make some money (from profit-taking) but the buyers came back and it turned around sharply.
“It is still unclear what is going to happen to the US economy and we still have a difficult period to get through but we have broken the downturn.”
Vodafone endured a rollercoaster day after reports it was delaying the launch of commercial next-generation services.
The group, which denied talk of any delays, fell 2% in morning trading but closed up by 1p at 97.5p – its highest level this month.
It was another good day for banks with Lloyds TSB up 29p at 598p, Barclays up 18p at 466p, HSBC up 5p at 750p and Royal Bank of Scotland up 20p at £15.60.
Drugs giants GlaxoSmithKline and AstraZeneca were also making progress, rising 16p and 51p to close at £13.75 and £24.06 respectively.
Other groups on the up included publisher Reed Elsevier, ahead 32p at 570p, airports operator BAA, up 21p at 541.5p and retailer GUS, up 22.5p at 488.5p.
But insurer Royal & Sun Alliance continued to struggle, falling over 4%, or 5.5p to 106.5p, to head the FTSE fallers’ board for a second day in a row.
The insurance giant slumped 21% yesterday after it reported lower operating profits and warned it may need to launch a rights issue to raise cash.
Outside the FTSE, coffee bar chain Coffee Republic rose another 11% after continued speculation about a bid for the business.
Potential suitor Caffe Nero said it had secured a £7m loan to fund its expansion today and threw the focus on organic growth.
Shares in Coffee Republic closed up 0.5p at 4.5p while Caffe Nero moved ahead nearly 4%, or 1p, to 27p.
Elsewhere, electronics and security group Laird rose 5p to 146p after it said it had made significant progress following a period of restructuring.
The group reported a bottom-line loss for the first half but said underlying profits from continuing businesses rose to £15.6m.
In the FTSE 100, the biggest climbers were Six Continents, up 38.5p at 585.5p, Friends Provident, up 8.5p at 140.5p, Reed Elsevier, up 32p at 570p and Aviva, ahead 29p at 520p.
The heaviest fallers were Royal & Sun Alliance, down 5.5p to 106.5p, Cable & Wireless, down 5p at 158p, Northern Rock, off 14p at 680p, and Xstrata, down 10p at 585p.
EGi News 09/08/02
