FTSE posts fifth day of gains

Share prices in London reacted to the expected onset of hostilities in the Gulf by posting a fifth successive session of gains today.

But the FTSE 100 Index fluctuated markedly, swinging from 30.8 points down in the first hour to 81 points ahead at lunchtime. As the afternoon progressed the index tempered its midday gains to close up 18.1 points at 3765.

News that all four supermarkets vying to take over Safeway were to be referred to the Competition Commission provided the other main focus of attention.

Hardest hit was Safeway itself which topped the Footsie fallers board with its share price tumbling 10% or 28.75p to 265.25p as investors contemplated another possible five months until the saga is completed.

Sainsbury’s also suffered as its shares lost 6p to close at 237p.

But rival Tesco surged more than 5%, lifting 9.5p to 187p, as investors tried to work out the possible winners and losers in the potential bid battle.

Morrisons, which has made the only firm bid so far, was a surprise referral but its shares still gained 4.5p to close at 175p. Bhs entrepreneur Philip Green is the only party not to be subject to an inquiry.

Across the wider market, there were signs that investors were booking profits after a 16% rise in the value of the Footsie in the last four days.

Shares have risen on the back of hopes for a short conflict, although a clutch of companies going ex-dividend provided a negative factor today.

Companies affected included Prudential, which closed down 14.5p at 346p, Six Continents, which lost 16p to 607p, Compass which dropped 11p to 285.5p and Alliance UniChem which was 16.25p cheaper at 411.75p.

Broadcasting group Granada was among stocks to enjoy a turnaround after seeing an earlier 5% decline end in a 3.25p rise at 65p.

Shareholders had initially been concerned by comments at the company’s AGM that advertisers were deferring expenditure because of the Gulf uncertainty.

Engineering group Rolls-Royce and British Airways also managed another rally despite both being on the brink of relegation from the Footsie.

British Airways rose 1.25p to 118.75p and Rolls-Royce gained 0.25p at 82.25p.

Separately, B&Q to Comet retailer Kingfisher shed 1.75p to 237p despite posting better-than-expected profits on the back of strong DIY sales.

Outside the Footsie, Leeds-based electrical components distributor Premier Farnell rose 9% or 14.5p to 171p after encouraging investors with its resilient performance over the last year.

Chief executive John Hirst said it had been a “year of achievement” despite a fall in annual profits.

And property group Slough Estates rose 6% or 17p to 290p after reporting a rise in pre-tax profits.

The biggest Footsie risers were Royal & Sun Alliance up 4.5p at 72.5p, Tesco up 9.5p at 187p, Granada up 3.25p at 65p and Tomkins up 9p at 195p.

The biggest fallers were Safeway down 28.75p at 265.25p, Amersham down 26p at 392p, Prudential down 14.5p at 346p and Alliance UniChem down 16.25p at 411.75p.