Bargain hunters propped up the London market today as the FTSE 100 Index surged almost 100 points in the wake of recent heavy losses.
The FTSE is at its lowest level for six years but the bears were in hiding while investors chased cheap looking stocks.
By lunchtime, the top flight index had moved 82.2 points ahead at 3753.3 after reversing a 40 point loss earlier in the session.
Better-than-expected business confidence data from Germany further helped sentiment while the City was also hoping that US markets would follow Europe’s lead and post gains after several downward sessions.
The Dow Jones Industrial Average fell to a four-year low last night after the Federal Reserve resisted pressure to cut interest rates.
In London, financial stocks were among those driving the improvement with Barclays ahead more than 7% or 25.5p to 380.5p, Lloyds TSB up 27p to 483.5p and Royal Bank of Scotland 46p stronger at £12.41.
Insurance stocks also recovered lost ground and included Aviva up 18.5p at 364p, Prudential ahead 10.5p at 349.5p and Royal & Sun Alliance up 4.5p at 98.5p.
Other factors lifting the London market included an encouraging update from heavyweight pharmaceutical giant AstraZeneca.
The group’s shares surged 4% – up 77p at £18.76 – after it said it had taken a key step towards launching its lung cancer treatment Iressa.
The Oncology Drugs Advisory Committee (ODAC), which reports to the US Food and Drug Administration, has voted in favour of accelerated approval.#
GlaxoSmithKline’s shares also rose 14p to £11.59.
Elsewhere, telecoms groups Vodafone and mmO2 both posted gains of more than 2% – ahead 2p and 1p at 85.5p and 41p respectively.
But Cable & Wireless continued to suffer – down 3% or 3p to 112.5p – as last week’s profits warning continued to knock sentiment.
However, satellite broadcaster BSkyB emerged as a FTSE frontrunner after the market warmed to news of its deal to show Champions League football games from next season. Shares rose 36p to 524p.
On the results front, engineering giant Smiths Group rose 30p to 635p after full-year figures met most analysts’ expectations.
And outside the top flight index, restaurant chain Groupe Chez Gerard was on the menu as former pubs operator Paramount considered a takeover approach.
Shares in the business soared 27% – up 17.5p at 80.5p – after Paramount said it may make an offer at a “significant premium” to last night’s share price.
But retailer Laura Ashley slumped 1.5p to 11.5p – a 11% fall – after showing how a challenging first half had pushed it into the red.
EGi News 25/09/02
