Footsie closes up sharply

The FTSE 100 Index closed up sharply today trumping earlier fears of another downbeat session.

A strong showing on Wall Street helped lift London’s benchmark index above earlier moderate gains to close up 70.1 points at 3940.3.

The effect on the Asian economy of the Sars outbreak had been expected to curb world markets, but by the time the FTSE closed the Dow Jones Industrial average was up 131 points at 8437.

Only 13 companies in the UK blue chip index finished the day in negative territory, and the risers board was dominated by financial stocks.

Leading the banks Barclays closed up 6% or 23.75p at 442.75p, closely followed by Standard Chartered up 5% or 34p at 689.5p and Abbey National which gained 21.75p to reach 451p.

Meanwhile Norwich Union owner Aviva led the insurers up 23.5p at 446p.

But the biggest gain on the FTSE 100 Index was made by drinks giant Scottish & Newcastle after it said it planned to sell its entire pubs and restaurants estate and buy the Strongbow cider maker Bulmer.

Despite making an uncertain start following the announcement, shares finished the session up 8% or 26.75p at 369p. Meanwhile Bulmer surged 43%, taking it up 97.5p to 322.5p.

The day also saw more gains for advertising giant WPP, which rose 5% or 20p to close at 450p, as investors digested comments on Friday that the group was hoping for a recovery in the advertising sector in 2004.

WPP’s rise was in stark contrast to fellow advertiser Cordiant Communications which saw its shares lose almost two thirds of their value dropping 17.75p to 9.75p after losing a key contract with drinks giant Allied Domecq.

Cordiant also warned that it was considering postponing its annual results announcement due on Wednesday – a move which would see its shares suspended.

Outside the Footsie, it was also a mixed session for biotech stocks.

Drugs supplier Powderject Pharmaceuticals made strong gains in the FTSE 250 Index after confirming it had received a takeover approach from an undisclosed bidder.

Shares in the vaccines specialist rose 7% or 34p to 516.5p on the news.

But Celltech saw one of the biggest falls of the FTSE 250 following its announcement on Friday that trials of an asthma drug had been stopped. Shares tumbled 7% or 20p to 260p today.

Roadside assistance group RAC saw its shares lift 8% after it announced the sale of its mechanical handling businesses Lex Harvey and Lex Birchwood in a £98.7 million deal. Shares climbed 30.5p to 432.5p.

Meanwhile, supermarket firm Somerfield rose 2% or 1.75p at 95p following weekend speculation that entrepreneur John Lovering and his takeover consortium would return with a higher offer.

And transport company Stagecoach rose 1.5p to 41.5p after reassuring investors that full-year profits would meet expectations despite the impact of Sars on its business in Hong Kong.

The biggest Footsie risers were Scottish & Newcastle up 26.75p at 369p, Barclays up 23.75p at 442.75p, Aviva up 23.5p at 446p and Standard Chartered up 34p at 689.5p.

The biggest fallers were Shire Pharmaceutical down 29.5p at 390.5p, Reckitt Benckiser down 19p at 1124p, Cable & Wireless down 1.75p at 76.5p and Compass down 3.25p at 289p.