Footsie closes on upbeat note

The FTSE 100 Index ended the session on an upbeat note today as investors took the first interest rate rise in almost four years in their stride.

After opening on an uncertain note – sinking 20 points into the red in early trading – the benchmark index moved back towards break-even point as the Bank of England’s announcement approached.

In the end news of the expected 0.25% rise removed any lingering uncertainty and the Footsie closed up 20.8 points at 4324.2.

The Footsie even managed to hold its own in the face of a disappointing showing on Wall Street where the Dow Jones was almost 30 points lower as trading in London closed for the day.

Financial stocks – both mortgage lenders and savings providers – reacted positively on the whole to the interest rate announcement.

Insurer Aviva led the way, gaining 11p to 491.5p while Prudential climbed 6.5p to 475.25p, and Friends Provident inched 0.75p upwards to 138p.

Among the banks, Halifax owner HBOS was up 13p at 699.5p and HSBC climbed 1p to 893.5p. But Royal Bank of Scotland failed to benefit, easing 8p to 1543p.

While corporate news did little to move top flight shares, publishing group Pearson’s announcement that it had landed a seven-year contract to administer the theory part of driving tests sent it 19p higher at 650p.

And results from investment group 3i received a positive reception with shares gaining 15.5p at 628.25p.

But retailer Boots ended the day 7p lower at 710p after warning of margins coming under pressure in the second half of its financial year.

Results for the first half showed profits ahead 10.7% to £280.5 million and also contained a pledge by chairman Nigel Rudd to revitalise the group.

And shares in airports operator BAA were off 2.75p to 474.25p after reporting a fall in half-year profits fell 4.3%.

The company stuck by forecasts of 4% annual passenger traffic growth, with a record August figure helping to offset the effects of the Iraq war and SARS earlier in the year.

Most of the main movement was outside the top flight, with pubs group Punch Taverns surging 14% or 48.5p to 398p after announcing a deal to buy the Pubmaster estate. Rival Enterprise Inns was also doing well, gaining 5% or 38.5p at 860p.

But a 25% easing in third quarter losses did nothing for shares in cable group Telewest which slipped 1% – a fall of 0.02p to 2.11p.

Meanwhile, sugar and starch giant Tate & Lyle climbed 16p to 330p after reporting a 14% fall in pre-tax profits to £111 million – broadly in line with City forecasts.

The biggest FTSE 100 risers were Scottish & Newcastle up 14.25p at 364.25p, Hilton ahead 6.5p at 203.75p, Pearson up 19p at 650p, Dixons ahead 4p at 139.5p.

The biggest fallers were Liberty International down 14.5p at 634.5p, Centrica off 3.75p at 189p, Cable & Wireless down 2.5p at 129p and Tomkins off 5.25p at 277.5p.