Footsie ends dull week on a high as blue-chips surge

BLUE-CHIP shares raced ahead yesterday to end an otherwise gloomy week on a high note.

The FTSE 100 halted four days of losses as a host of corporate updates and a stronger showing on Wall Street lifted trading. It meant the top flight index was able to pull through the 4100 mark to close 96.2 points ahead at 4107.2.

In the UK, the hard-pressed manufacturing sector was boosted by official data showing a larger-than-expected bounce back in output in July. And in the US, traders were cheered by data showing the nation’s unemployment rate in August had seen a surprise improvement.

It meant that by London’s close, the Dow Jones Industrial Average was up more than 140 points while the tech-laden Nasdaq had also shot ahead into positive territory.

In the City, Heavyweight financial stocks supported the market. Insurance giant Royal & Sun Alliance soared 10p to 131p, an 8% gain which saw it head the FTSE risers’ board. The stock was boosted by rumours R&SA is close to unveiling a rights issue.

Life assurer Friends Provident gained 6p at 136p, fund manager Schroders NV was 34p stronger at 175p, HBOS added 14p at 684p, Barclays was up 6p at 436p and Royal Bank of Scotland jumped 46p at £15.36.

Among corporate news, supermarket chain Safeway moved ahead on speculation about its future.Press reports said rival Asda, owned by US giant Wal-Mart, was interested in buying the business. Safeway responded that it had received no approaches, nor was it holding takeover discussions, but the shares rose 15p at 221p while rival Sainsbury’s gained 13p at 322p, Marks & Spencer added 13p at 348p and electrical chain Dixons was ahead 7p at 167p.

But most of today’s key updates were restricted to smaller stocks and The biggest retail announcement came from Topshop owner Arcadia has agreed to accept Bhs billionaire Philip Green’s offer of £770 million, or 408p per share, for the group and its shares raced ahead 16p to 404p.

Elsewhere, no-nonsense pubs group JD Wetherspoon toasted a 10p rise to 301p after cheering the City with its full-year figures.

But leisure group Rank slipped 3p to 259p after reporting lower sales in its Hard Rock cafes.

And British Energy saw its shares suspended at 80p after warning it faced insolvency if it did not receive immediate financial support.

The move appeared to put larger blue-chip energy groups under pressure, with Centrica down p at 179p and International Power off 1p at 110p.

The former National Power group warned two days ago that low electricity prices in the UK and US may hit earnings next year.

Back in the FTSE 100, the biggest risers were Royal & Sun Alliance, up 10p at 131p, Schroders NV, up 34p at 475p, Safeway, up 15p at 221p and Amvescap, up 26p at 410p.

The heaviest fallers were Imperial Tobacco, down 38p at £10.83, EMI, down 2p at 168p, International Power, down 1p at 110p and Land Securities Group, down 8p at 770p.

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