FTSE morning push gives investors relief

UK Investors were today given some relief from last week’s woes as the FTSE 100 Index pushed ahead during morning trading.

The fragile market last week slumped to its lowest close since September 24, with a sharp fall on Friday wiping £34bn (€53bn) from the value of the index.

But after trading closed in London, shares on Wall Street managed to battle back from harsh losses to give a lift this morning.

World Cup fever also helped the mood, and by lunchtime the FTSE 100 Index was up 63.9 points at 4694.7.

Sentiment was boosted by hopes of a positive start on Wall Street later today.

Tom Hougaard, trader at City bookies Financial Spreads, said: ‘‘We’re expecting the Dow Jones Industrial Average to move up a good 30, 35 points on the open and Nasdaq to bounce too.

‘‘We’re not calling this the end of the downturn but we’re hoping we can build on some sort of base. Stocks are so oversold that we’re expecting to see two or three day’s rally.’’

But Mr Hougaard warned that markets in the both the UK and US were then likely to fall again.

David Buik, at financial bookies Cantor Index, agreed and said it would be no surprise if the FTSE 100 were to drop by another 150 points.

Justin Urquhart Stewart, at Seven Investment Management, expects the FTSE 100 to fall to around 4300 - 4500 before improving.

However, he sounded a note of reassurance for those worried about pensions.

‘‘For people concerned about endowments or pensions, I would say these are long-term investments and people shouldn’t be worried about the short-term bungee jumping of the stock market,’’ he said.

He suggested investors looked at ‘‘safehavens’’ such as tobacco, utilities and drinks companies, but advised punters not to invest new money at the moment.

Among the shares that were driving the FTSE 100 higher today were insurance companies, boosted after a broker upgraded stocks in the sector.

Heavyweight oil stocks were also adding support following a rise in the price of crude.

And bookies William Hill helped sentiment by getting off to a solid start on the London market.

Shares were offered at 225p, in the upper half of the 190p-240p range, and rose to 242¼p in conditional trading.

Many believe the timing of William Hill’s flotation - during the World Cup - is boosting trading.

However, few corporate announcements are scheduled this week and market movement is likely to be dictated by economic news and by the US.

In the UK, the focus is on whether interest rates will rise in July or August, inflation figures tomorrow, the Bank of England’s minutes on Wednesday and high street sales data on Thursday.