Footsie rallies round to nearly break 4000 barrier

THE FTSE 100 Index staged a spirited attempt to break through the 4000 barrier yesterday as bargain hunters flocked to the beleaguered banking sector.

By the close the Footsie had put aside several days’ losses to rally almost 3% or 105.9 points from Friday’s nine-week low to reach 3984.

Heavyweight banking stocks led the way as investors decided to make the most of the recent sell-off caused by fears of rising bad debts.

News of a bumper takeover offer by French bank Credit Agricole for its rival Credit Lyonnais also buoyed sentiment in the sector.

Those on the way up included Barclays, ahead 22.25p to 397.5p, Abbey National, 20p stronger at 518p, Lloyds TSB, 17.5p healthier at 457p and Royal Bank of Scotland, up more than 5%, or 75p to £15.03.

HBOS, which is due to issue a trading statement tomorrow, led the charge with an improvement of 7%, or 42.5p, to 647p. Insurers also followed suit with Royal & Sun Alliance adding 9p to 134p and Aviva rising 25p to 484p.

Energy stocks also drove the London market higher as crude oil prices made another upwards move. BP rose 15.5p to 426p and Shell lifted 10.25p to 404.5p.

Of the other high-flyers, troubled telecoms group Cable & Wireless was on the up in its last week in the top flight before demotion to the FTSE 250.

Reports over the weekend of a planned £1.5 billion break-up bid pushed shares in the business up to 45.75p, a rise of 5%.