Footsie closes with small gains

The FTSE 100 Index completed another positive session today despite surrendering most of its earlier gains.

A mid-afternoon wobble on Wall Street, which sent the Dow Jones Industrial Average briefly into negative territory, was enough to trim gains for the London index.

After climbing to within nine points of the 4200 barrier – up more than 43 points – the benchmark index settled for a more modest 11.2 point gain to close at 4161.3.

A strong overnight performance from the Dow Jones helped to drive earlier gains while takeover talk pushed up a number of stocks outside the top flight.

Following a tentative start to the week, with the Footsie stuck at around 4100, the mood in the City appears to be slowly improving.

Banks were once again prominent among the risers after a positive trading statement from Royal Bank of Scotland yesterday.

After putting on more than £1 yesterday, Royal Bank climbed a more modest 14p to 1736p today while Barclays gained 2% or 9.75p to close at 461.25p, and Standard Chartered continued its return to form, climbing 12.5p to 750p.

The bank, which has a strong presence in the Far East fell as low as 632p in March amid fears over the Sars outbreak.

Today’s biggest gains were for mining group Xstrata after it said it was confident an Australian court would back its takeover of MIM. Shares climbed 15.5p to 443p.

Other risers included support services and distribution company Hays, up 3p to 96.75p despite confirmation that it will be relegated from the Footsie next week. Fellow distribution company Exel lifted 21p to 681p.

Meanwhile the oil and telecoms sectors were also benefiting from the London market’s improved sentiment.

BP gained 7p to 446p and Shell added 6p to reach 425.25p while among telecoms BT rose 3.25p to 197.75p, Vodafone edged 0.75p higher at 124.75p and battered stock Cable & Wireless climbed 4% or 3.75p to 108p.

Outside the top flight, discount retailer Matalan surged more than 12% or 21.25p to 191.25p, as the market speculated that founder and executive chairman John Hargreaves could be about to sell to Asda owner Wal-Mart.

Matalan denied it had received any bid.

Elsewhere, security products group Chubb was again on the up after ending days of speculation and announcing that it had agreed the terms of a £622 million takeover by US giant United Technologies.

Chubb described the widely-anticipated 75p-per-share offer as “fair and reasonable”. Shares rose 2.25p to 75p.

Infrastructure services company Jarvis, which announced an annual profits rise of 37% today, rose 1p to 339p, although the gain was not as great as the 10p surge achieved at the start of trading.

Jarvis had cheered investors by forecasting that early-stage profits from its London Underground project would be £5 million higher this year than envisaged.

The biggest Footsie risers were Xstrata up 15.5p at 443p, Cable & Wireless up 3.75p at 108p, Amvescap up 15.25p at 447.25p and Carnival up 59p at 1800p.

The biggest fallers were Tesco off 7p at 205p, Centrica down 6p at 180.25p, AB Foods down 12.5p at 537.5p and National Grid Transco down 8.25p at 398.25p.