London shares surge ahead

Optimistic investors pushed the FTSE 100 Index towards its highest level since September today, fuelling hopes for a strong end to the year in the City.

Telecoms, banking, media and retail stocks were all on the front foot after an upbeat session on Wall Street overnight boosted spirits.

And by lunchtime the Footsie was up 60.2 points at 4155.1 after mounting a fresh assault on the key 4200 support level earlier in the session.

The blue-chip index last closed above 4200 two months ago and analysts said the strength in the City today showed a breakthrough may be on the cards.

Peter Cogliatti of Williams de Broe said: “If we get through 4200, then 4400 may be the next stop for the end of the year before moving on to 4600.”

A strong start in London had been forecast the moment Wall Street closed last night with the Dow Jones Industrial Average 148 points better off.

US computer giant Hewlett Packard raised morale still further after the end of trading in New York by reporting quarterly revenues ahead of expectations.

In London the Footsie soared 93 points higher early on before settling back down as investors hoped for another strong session in the US later today.

Mobile phone giant Vodafone climbed 3.25p to 122.75p while software firm Sage, the only tech in the top flight, surged 7.5p to 158p.

Of the banks, Barclays rose almost 3%, or 12.25p to 457.25p, while HSBC climbed 14.5p to 747.5p and Royal Bank of Scotland moved up 33p to £15.38p.

Media stocks were also making up ground with BSkyB up 21p at 635p, FT publisher Pearson rising 22p to 682p and advertising group WPP up 18.5p at 471.5p.

Investors were also given a lift by corporate news with Argos owner GUS stunning the market with a £900 million move for DIY empire Homebase.

Shares in the retailer rose 3%, or 20p to 607p, as analysts applauded the buy and half-year results showing a 20% jump in underlying profits.

Supermarket chain Safeway also found some support after reporting a 4% rise in interim profits, rising nearly 5%, or 11p, to 235p.

Official figures showing retail sales grew 0.8% in October, more than double the growth expected in the City, gave other retailers a lift.

Marks & Spencer climbed 3.5p to 348.25p, Next rose 11p to 824p and among other grocers Tesco edged up 1.25p to 201.5p while Sainsbury’s rose 4.5p to 296p.