London market closes on rare high note

The London market finished on a rare high note today after an upbeat start on Wall Street boosted trading.

Investors were relieved key data from the US Institute for Supply Managers was not as bad as feared and the Dow Jones Industrial Average moved ahead.

That supported London, where bargain hunters were pushing shares ahead after yesterday’s £44 billion sell-off.

Then the FTSE 100 Index closed down nearly 200 points but today the session ended up 75.6 points at 3797.4.

Also boosting the market were signs from the Nationwide Building Society that the UK housing market had remained buoyant last month.

Banks with strong exposure to the mortgage market were lifted and HBOS rose 33p to 620.5p, Abbey National added 35p to 550p and Barclays was up 26p at 397.5p.

Former building society Northern Rock bucked the trend, however, down 16.5p at 639.5p.

It said it was on track to deliver final figures at the top end of forecasts but the update failed to inspire the market.

Some analysts were disappointed that the trading update did not give a more detailed view about Northern Rock’s prospects for 2003.

Other stocks propping up the market included oil duo Shell – ahead 16.75p at 395.75p – and BP, up 10.5p at 435.5p after another rise in the price of crude.

But mobile phone group mmO2 was the day’s biggest riser, up 4.25p at 44.25p.

The 11% rise came as it stuck to its financial targets today as it announced plans to launch a multimedia messaging service later this month.

But there was no such joy for hotels group Six Continents as investors mulled over plans to demerge its bars and restaurants division.

It will also return a total of £970 million to shareholders over the next year but analysts were concerned about how the demerger would affect credit ratings for the proposed companies.

Shares fell 10%, or 62p to 531p, to top the Footsie fallers board.

Outside the top flight, music retailer HMV fell 12p to 121.5p despite a trading update indicating sales were recovering in time for Christmas.

But leading the FTSE 250 fallers was support services group WS Atkins.

It ploughed 72% or 137p to 52p after revealing costs and debts had spiralled following tough conditions in North America and the UK private sector.

The bleak update, which coincided with chief executive Robin Southwell’s departure, left WS Atkins with a market value of just £51.7 million.

The warning on half and full-year profits also shattered confidence in support services at a time when PFI projects are under increasing political pressure.

Among the sector’s other fallers, Amey slipped 10p to 65.5p and Jarvis slumped 16p to 202.5p.

Back in the FTSE 100, the biggest risers were mmO2, up 4.25p at 44.25p, Cable & Wireless, up 9.5p at 125p, ICI, up 16.75p at 220.75p and Barclays, up 26p at 397.5p.

The heaviest fallers were Six Continents, down 62p at 531p, Capita Group, down 8p at 190p, J Sainsbury, down 10.25p at 269.75p and SABMiller, down 13.75p at 422.25p.