Footsie edges towards 4000 mark

Britain’s biggest companies enjoyed their best day in the City for over a month today as the FTSE 100 Index climbed back towards the 4000 barrier.

Hefty gains by a host of heavyweights including a near 9% rise by BT helped the Footsie close 154.4 points higher at 3850.6 – the biggest one-day gain since August 15.

Trading was lifted by a strong start on Wall Street, as US markets built on progress last night, while investors were also back on the look out for bargains.

Martin Dobson, head dealer at NatWest Stockbrokers, said a number of heavyweight stocks had been oversold in the Footsie’s slide to a six-year low earlier this week.

But he added investors were trading “on impetus”. He said: “There’s not really a change in sentiment just a change of tack. People are saying ‘Let’s go with the flow’.”

Telecoms were among the pacesetters with BT rebounding from its recent 14-year low after a positive note from stockbroker ABN Amro – jumping 13.25p to 167.25p.

An upbeat forecast from Finnish mobile phone giant Nokia that industry-wide handset shipments would grow 10-15% next year helped Vodafone climb 5.25p to 87.5p.

Banking shares, hit hard in the recent sell-off, were also on the front foot with Barclays climbing 6%, or 22.25p to 389p, HSBC up 20p to 684.5p and Royal Bank of Scotland up 44p at £12.62.

And rising oil futures helped BP and Shell both close almost 6% higher, with BP climbing 23.5p to 441.5p and Shell moving ahead 21p to 391p.

Elsewhere drugs giant AstraZeneca continued to benefit from yesterday’s decision by a key US committee to vote in favour of an approval for its lung cancer drug Iressa.

AstraZeneca rose 5%, or 97p to £19.91 and Shire Pharmaceuticals climbed 24.5p to 549.5p after sticking to its earnings targets for the current year.

The Footsie was in positive territory all day and gathered momentum after Wall Street opened for trading this afternoon.

Stronger-than-expected durable goods orders in the US helped the Dow Jones Industrial Average move ahead 100 points in early trading in New York.

Only seven top flight stocks lost ground in London and the improving picture helped insurers with Prudential up 25p to 369p and Aviva ahead 15p to 372p.

Among smaller stocks, Capital Radio rose 22.5p to 477.5p after announcing DJ Chris Tarrant would stay with the station to launch a new breakfast show. The announcement came after speculation the DJ may leave.

And tour operator First Choice rose 3.5p to 95p after saying it expected full-year profits to be in line with expectations.

Elsewhere, budget clothing group QS closed 32% ahead after agreeing to be taken over in a 40p per share bid.

The retailer, once known as Quality Seconds, is being bought by a consortium of investors led by the founder of ladieswear chain Bon Marche. It closed 9.5p higher at 39p.

In the FTSE 100, the highest risers were Amvescap, up 27.5p at 334.5p, GKN, up 21p at 255.75p, Granada, 6p higher at 74p and BT, up 13.25p at 167.25p.

The heaviest fallers were Hanson, down 6.5p at 331p, National Grid, off 5p at 452p, Diageo, down 7.5p at 797p, and United Utilities, down 4.5p at 597p.