FTSE moves closer to 4,000 barrier

The FTSE 100 Index staged a spirited attempt to break through the 4000 barrier today as bargain hunters flocked to the beleaguered banking sector.

By the close the Footsie had put aside several days’ losses to rally almost 3% or 105.9 points from Friday’s nine-week low to reach 3984.

Heavyweight banking stocks led the way as investors decided to make the most of the recent sell-off caused by fears of rising bad debts.

News of a bumper takeover offer by French bank Credit Agricole for its rival Credit Lyonnais also buoyed sentiment in the sector.

Those on the way up included Barclays, ahead 22.25p to 397.5p, Abbey National, 20p stronger at 518p, Lloyds TSB, 17.5p healthier at 457p and Royal Bank of Scotland, up more than 5%, or 75p to £15.03.

HBOS, which is due to issue a trading statement tomorrow, led the charge with an improvement of 7%, or 42.5p, to 647p. Insurers also followed suit with Royal & Sun Alliance adding 9p to 134p and Aviva rising 25p to 484p.

Energy stocks also drove the London market higher as crude oil prices made another upwards move. BP rose 15.5p to 426p and Shell lifted 10.25p to 404.5p.

Of the other high-flyers, troubled telecoms group Cable & Wireless was on the up in its last week in the top flight before demotion to the FTSE 250.

Reports over the weekend of a planned £1.5 billion break-up bid pushed shares in the business up 2.25p to 45.75p, a rise of 5%. Among other telecoms, mmO2 gained 3.5p to 50.75p and Vodafone lifted 3.75p to 116.25p.

High street chemist Boots also improved as investors cheered confirmation it had begun the search for a new chief executive to replace Steve Russell.

Chairman John McGrath is also going as the company attempts to “speed up” the pace of strategic change and its shares rose 19.5p to 569.5p.

But Marks & Spencer fell 3%, or 10.25p to 324p, on speculation of poor clothing sales in the run-up to the crucial Christmas period.

The speculation in a press report led to a mixed reaction elsewhere with Next down 3p to 777p and B&Q retailer Kingfisher off 1.75p at 221p.

Among corporate news today, stricken telecoms group Marconi confirmed the final details of a life-saving debt-for-equity swap.

It will slash debt and leave shareholders with just a 0.5% interest but shares in the former giant rose 4%, or 0.08p to 2.03p.

Recruitment consultancy Robert Walters dived almost 17%, or 9.5p, to 47.5p, after warning the gloomy jobs market meant it would only break-even in the second half.

But restaurant group Pizza Express surged 24% – up 64.5p to 330.5p – after the group said it had received an undisclosed number of takeover approaches.

The biggest Footsie risers were mmO2 up 3.5p at 50.75p, Royal & Sun Alliance ahead 9p at 134p, HBOS up 42.5p at 647p, Capita Group ahead 16.25p at 256p.

The biggest fallers were Marks & Spencer down 10.25p at 324p, Shire Pharmaceuticals off 11.5p at 393.5p, Invensys down 1.5p at 52.5p and Amersham off 14p at 555p.