Footsie hits two-month high

The FTSE 100 Index achieved its highest close for two months today after a rush of positive news provided investors with cause for cheer.

Hopes for a strong end to the year in the City were raised as banking, media, telecoms and retail stocks pushed the Footsie up 95.1 points to 4190.

The blue-chip index last closed above 4200 in early September and analysts said the strength 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.

That provided Wall Street with further momentum today and US investors were also lifted by better-than-expected US jobless numbers.

In London there was an improvement across the board, helped by buoyant retail sales numbers and news that GUS had bought Homebase for £900 million.

Shares in Argos retailer GUS rose 6%, or 35p to 622p, 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, with its shares rising nearly 3%, or 6p, to 230p.

Official figures showing retail sales grew 0.8% in October, more than double the growth expected in the City, boosted many retailers.

Marks & Spencer climbed 4p to 348.75p, Next rose 11p to 824p and among other grocers Tesco edged up 1.5p to 201.75p while Sainsbury’s rose 6.25p to 297.75p.

Of the banks, Barclays rose more than 4%, or 20p to 465p, while HSBC climbed 9p to 742p and Royal Bank of Scotland moved up 45p to £15.50p.

Media stocks were also making up ground with BSkyB up 35p at 649p, FT publisher Pearson rising 36.5p to 696.5p and advertising group WPP up 44p at 497p.

And among other stocks, mobile phone group mmO2 continued to fluctuate in the wake of its interim results announcement on Tuesday.

Shares moved 6% ahead – up 3.25p to 55p – while rival Vodafone built on its recent strong run to reach 125.75p, an improvement of 6.25p.

Bargain hunters also sought out steel group Corus following the hefty falls endured after a profits warning last week.

Shares rallied 10%, or 2.75p to 29.25p, to top the Footsie risers board.

In contrast, Anglo-Australian industrial services group Brambles lost a third of its market value – down 66.75p at 129.75p – after warning that full-year profits would be hit by problems at its European pallets business.

The biggest Footsie risers were Corus Group up 2.75p at 29.25p, WPP Group ahead 44p at 497p, Amvescap up 40.5p at 459.75p, Royal & Sun Alliance ahead 11p at 128p.

The biggest fallers were Brambles down 66.75p at 129.75p, SABmiller off 15.5p at 440p, BAT down 15p at 627p, Xstrata off 12p at 603.5p.