Footsie pulls clear of 4000 mark

The benchmark FTSE 100 Index extended its early gains today to levels not seen since early December as a fresh feeling of confidence returned to the London market.

Building on their recent solid progress, blue-chip shares took encouragement from yesterday’s 36-point gains and a frenzy of merger and acquisition activity.

The Footsie, which has risen more than 25% since March – stood at 4070.4 by mid-morning, a 59.3-point gain.

Also among those benefiting were media sector shares where Reuters climbed 8% or 12.5p to 174.5p, ITV company Granada lifted 8% or 5.5p to 74.5p and BSkyB cheered 5.5p to 676.5p.

Meanwhile in the FTSE 250 Index Granada’s potential merger partner Carlton Communications was among the risers – climbing 9% or 9p to sit at 109p.

Insurance companies benefited from the upbeat mood, with Legal & General up 2.5p at 88.5p, Norwich Union owner Aviva ahead by 8p at 439p and Prudential rising 5p to 402.75.

Royal & Sun Alliance also got in on the action, gaining 6.75p to 126.75p while Friends Provident inched up 3p to 112p.

Banking stocks were also doing well. Barclays rose 12.25p or 3% to 427.5p, HBOS gained 20.5p to 735p and Abbey National edged up 4.5p to 483.25p.

Lloyds TSB was also ahead, rising 11.25p to 435.25 after announcing the sale of its French wealth management operations to UBS.

Rising even higher was property investment group Chelsfield, which gained 53p or 22% to 300p after confirming that it had received a preliminary management buy-out approach from its chairman.

Investors welcomed a trading update from hotels giant Hilton which said that a strong performance for its bookmaking arm Ladbrokes helped offset the impact of the Iraq war and Sars outbreak on its hospitality business. Shares rose 2p to 172p.

Elsewhere battered advertising group Cordiant Communications managed to climb 0.5p to 9.25p – a 5% rise – after saying that it had now reached a definitive agreement with its lenders to continue financing arrangements until July 15.

Earlier this month news of an agreement in principle on the arrangements cleared the way for the company to release its 2002 results just in time to avoid seeing its shares suspended.

The few Footsie losers were the utility companies, traditionally seen as a safe haven in times of trouble. With improved market confidence, Scottish Power was down 2.25p at 367.75p, United Utilities fell 2.25p to 618p and Scottish & Southern Energy lost 8p to 656.5p making it the biggest faller so far.