FTSE ends on positive note

London shares ended the week on a positive note today as HSBC helped to push the FTSE 100 Index further away from the 4000 barrier.

The City’s fourth-biggest stock rose 7% as investors reappraised yesterday’s £9 billion purchase of US credit firm Household International.

Oil giants BP and Shell also moved higher while battered telecoms group Cable & Wireless finally recovered some ground, albeit a rise of just 1.25p.

And after being on the front foot for all of the session, the FTSE 100 closed ahead 38.5 points at 4091.6 – a gain of 1.4% on the week.

But Martin Dobson, head dealer at NatWest Stockbrokers, said most investors spent the day on the sidelines with hedge funds dominating trading.

He added: “It feels as if we are stuck in a rut at the moment, there’s not any momentum behind the market.”

A subdued start on Wall Street, where the Dow Jones Industrial Average drifted despite positive US consumer sentiment figures, did little to help spirits.

HSBC’s gain, of 48.5p to 728p, wiped out falls yesterday caused by fears the Household deal would dilute the value of its shares.

Investors today focused on the strategic merits of the move, with stockbroker Merrill Lynch helping out by upgrading the stock to neutral from sell.

But it was a different story elsewhere in the banking sector, with Lloyds TSB falling 22.5p to 507.5p on fears the group may cut its dividend.

Barclays was down 5.5p at 431.5p, Abbey National fell 7p to 660.5p and HBOS drifted 3p lower to 709p.

But it was a better day for other market heavyweights, with BP up 7.5p at 410p and Shell closing ahead 8.5p at 411p.

And Cable & Wireless, hit hard by the negative reaction to Wednesday’s plans for a shake-up of its Global arm, edged up 1.25p to 75.75p.

Other risers included engineering group Tomkins, up 8.25p at 206.75p after an upgrade from stockbroker Lehman Brothers.

Elsewhere, catering group Compass rose 10.5p to 279.25p after strong results from French rival Sodhexo.

But with corporate news thin on the ground, most action was restricted to smaller stocks with model train maker Hornby steaming ahead 3%.

The group showed its recent revival remained on track after doubling half-year profits and trebling its interim dividend. Shares rose 16p to 482.5p.

Drugs group CeNeS Pharmaceutical also made up ground, rising 7% after positive results from clinical trials of its painkiller M6G.

The morphine-based treatment will now enter Phase III trials next year with a view to a launch in 2005. The group’s shares nudged up 0.25p to 3.75p.

And software firm Orchestream added 16%, or 0.75p to 5.5p, after third-quarter results from the former stock market star pleased the City.

The highest blue-chip risers were HSBC, up 48.5p at 728p, WPP, up 29.5p at 460p, 3i Group, up 31.5p at 533.5p and Amvescap, 20.25p higher at 415p.

The heaviest fallers were Next, down 39p at 859p, Lloyds TSB, down 22.5p at 507.5p, Canary Wharf, off 11.5p at 270p and Northern Rock, down 24.5p at 700p.