Footsie fights back

London’s benchmark FTSE 100 Index opened the new quarter with a powerful showing today, fighting back against the gloom which has dragged down markets on both sides of the Atlantic.

After ending September at a seven-week low last night, the blue chip index built on early gains to stand 77.9 points higher at 4169.2 by the close of trading.

The mood was shared on Wall Street where the heavy fall of the previous session was virtually wiped out in a bright start to business in New York.

Closer to home, surprisingly upbeat manufacturing figures fuelled the positive sentiment, with manufacturers appearing to benefit from the lower pound since the start of the year and signs of improvement in global demand.

The major corporate news of the day came from troubled nuclear power group British Energy, which said it had signed a deal to avoid being placed into administration.

The group’s shares were suspended at 5.35p pending signing of the agreement, but were later restored to trading as the deal was confirmed. The stock closed the session 0.03p higher at 5.38p.

Insurer Royal & Sun Alliance bounced back after yesterday’s losses, topping the list of Footsie risers with a 5.75p gain to 86.5p.

Banks dominated the risers’ list with newly rebranded Abbey National, now known as just “abbey”, up almost 5% or 23.5p at 517.5p, Barclays gained 23p to 484.75p while HBOS climbed 28.5p to 716.5p.

Logistics group Exel was among other risers with a 29.5p advance to 692p.

Retail shares had a largely positive performance despite yesterday’s rebased official retail sales figures, which showed showed a weaker performance than earlier thought, and a disappointing CBI survey.

B&Q owner Kingfisher gained 4p to 265p, Argos-to-Homebase business GUS was up 16.75p at 672.75p and takeover target Safeway put on 7.5p to 285p.

Consumer electronics retailer Dixons regained ground lost earlier in the session, moving 2p higher to 136.5p, while Next slipped 3p to 1121p.

Outside the top flight, building materials group RMC benefited from news of an approach for its struggling German business.

Its shares gained 5%, or 30.5p, to 626.5p and rival Marshalls was also on the up – gaining 10p to 257.5p.

In terms of scale, one of the the biggest movements of the day was embattled steel group Corus which staged a recovery during the afternoon to take back a 14% slump to stand 0.25p higher at 20.5p despite a broker downgrade.

But there was no such luck for reincarnated telecoms equipment firm Marconi Corporation which was down 30p at 420p as news of a new contract did nothing for shares.

Topping the Footsie risers board were Royal & Sun Alliance up 5.75p at 86.5p, Barclays ahead 23p at 484.75p, Abbey National up 23.5p to 517.5p and Shire Pharmaceuticals ahead 20.5p at 456.5p.

Leading the fallers were Wolseley down 13.25p at 689p, Bunzl off 7.25p at 448.75p, Tesco down 3p at 238p and Rentokil Initial off 2.5p at 210.75p.