London market continues to recoup losses

London shares rallied for the third session in a row today as the market regained some of its recent heavy losses.

By lunchtime, the FTSE 100 Index was up 101.6 points at 4118.2, buoyed by a rally on Wall Street on Friday, where the Dow Jones, Nasdaq and S&P 500 all finished ahead.

In addition, US indicies are expected to help sentiment further by continuing to rise after opening this afternoon.

Tom Hougaard, trader at City Index, said: ‘‘We saw decent buying going into the close on Friday in the US, and Asia took its cue from the US and rallied as well.

‘‘Both UK and Europe are doing very well this morning and we believe this optimism will influence the US traders.’’

Insurers, media groups and oil firms were among the risers in London today.

Media firm Pearson was up 4%, or 22p to 592p, as it reported a rise in profits and gave upbeat forecasts for its education business and Penguin books arm.

The group has however been hit by the advertising downturn and profits at its Financial Times group are forecast to slide by up to 15% this year.

Other media stocks on the way up included BSkyB, rising 21p to 564½p and Reuters, up 10¾p to 279¼p.

Insurers were also helping lift the market. Aviva and Prudential, which have been heavily hit in the recent sell-off, were up 16p at 411p and 23½p at 473½p respectively.

And oil giants Shell and BP, both due to report figures this week, made gains with BP up 19½p at 473½p in advance of its interim results tomorrow. Shell, which reports figures on Thursday, was up 12p at 410½p.

Among other Footsie stocks, airports operator BAA’s shares were broadly unchanged despite the group reporting a 6% slide in quarterly profits after lower passenger numbers and higher security costs hurt figures. Shares were up 3p at 469p.

Outside the top index, fashion chain Monsoon slipped 2%, down 2p to 109½p, despite reporting a strong rise in like-for-like sales and profits.

The group cautioned it was unlikely to maintain its high like-for-like sales growth over the remainder of the year.

Another faller was Coffee Republic, which plunged 15% as the group announced plans to sell 18 underperforming bars in a drastic bid to revive its fortunes.

The group said the move was the first part of a review designed to improve the profitability of the remaining 90 high street sites.

But on the way up was construction products group Aggregate Industries, which soared 11%, up 8p to 78p, after reporting figures at which beat forecasts. Both profits and turnover rose 6%.