FTSE closes 5% ahead

The London market shrugged off a raft of profit warnings to close 5% ahead today after yet another turbulent week for UK blue chips.

The FTSE 100 Index held firm above the 4000 barrier in solid afternoon trading, despite gloomy profits news and early falls on Wall Street following more dire news of America’s housing market.

Its two-day rebound saw it close up 201.6 points at 4063, recovering ground lost amid the devastating declines seen earlier this week.

But in more evidence that the economic downturn was hitting business, upmarket property firm Savills, car dealer Inchcape and UK Coal all told investors to brace themselves for worse than expected results – causing a share slide for the FTSE 250 trio.

The FTSE had pared back gains in mid-session trading amid expectations of a weak start to trading in New York.

The Dow Jones Industrial Average fell nearly 1% down, although the drop was not as bad as some feared after data revealed that home construction fell by a more than expected 6% last month – the lowest pace since early 1991.

Oil prices ticking higher to above 70 dollars a barrel underpinned the FTSE 100’s advance after oil cartel Opec brought forward December’s meeting amid speculation of a cut in production levels.

Royal Dutch Shell cheered 115p to 1350p, while BP added 34.25p to 431.75p, seeing them both add 9%.

Crude’s rise failed to stop some investors eyeing value in British Airways, which has been under pressure in recent days. Shares in the carrier rose 9.4p to 127.1p, while cruise ship giant Carnival was up 106p at 1478p.

Miners endured a mixed session, with Anglo American one of the leading risers - up 142p to 1295p – but Lonmin and Vedanta were in the red, by 20p at 1230p and 8.5p at 624p respectively.

Among other Footsie fallers was fashion chain Next, down 4p at 858p after John Lewis reported a 4.8% sales fall across its department stores last week.

B&Q owner Kingfisher had spent most of the day in negative territory after a downgrade for UK retailers from JP Morgan, but later clawed back lost ground to close 1.4p higher at 108.2p.

There were a raft of hefty falls in the FTSE 250 Index, led by a 38% plunge for Inchcape. The firm said both this year and next year’s results would be lower than expected due to slumping car sales, and saw its shares fall 48.75p to 78p.

UK Coal also tumbled 34%, or 68p to 132.25p after warning a recent slump in coal prices and production problems would leave profits “significantly below” expectations this year.

And Hovis bread maker Premier Foods saw its share price more than halve at one point amid fresh concerns over its financial position.

Shares closed down 15%, or 5.25p to 29.75p, although the firm said it would meet banking covenants.

The biggest Footsie risers were Autonomy up 111p at 876p, Anglo America 142p ahead at 1295p, Alliance Trust up 24.25p at 242.25p and BHP Billiton up 84.5p at 895.5p.

The biggest Footsie fallers were Aviva down 44.75p at 308.25p, Prudential down 27.75p at 270p, Fresnillo off 13.8p at 156.2p and Whitbread down 67.5p at 815p.

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