Footsie breaks 4500 mark

London shares achieved a two-month high today on the back of a decent showing by banks and oil stocks.

London shares achieved a two-month high today on the back of a decent showing by banks and oil stocks.

The FTSE 100 Index breached the key 4500 threshold to close 42.7 points up at 4502, its highest level since late June.

Fresh talk of a battle for banking group Abbey National was the highlight of a strong day for the banking and insurance sector.

Shares in Abbey rose 11p at one point, but receded to end the session 5.5p ahead at 603.5p, amid renewed rumours that HBOS may challenge an agreed offer from Spanish bank Santander Central Hispano. HBOS rose 6p to 685.5p.

The rest of the sector was doing well, with Lloyds TSB rising by nearly 2% or 7p to 424p, Barclays adding 6.25p to 520.75p and Royal Bank of Scotland up 24p to 1571p.

The oil industry was on top of its game after gains in the price of US light crude, which stood at more than 43 US dollars a barrel shortly after London’s close.

BP advanced 2% or 10.75p to 503.5p, while Shell progressed more than 1%, up 4.5p to 410p.

After yesterday’s late buying spree, investors in New York proved less enthusiastic to enter the market, leaving the Dow Jones Industrial Average just four points ahead after trading ended in London.

UK economic news was downbeat, with monthly data from the Chartered Institute of Purchasing and Supply showing slower manufacturing growth.

On the corporate front, property developer Land Securities was the top Footsie performer, adding 3% or 40p to 1190p as institutional investors expressed faith in commercial property specialists at the expense of housing developers. British Land was also doing well, lifting 17p to 736.5p.

News from Nationwide Building Society that house price growth slowed to a two-and-a-half-year low during August kept investors away from FTSE 250 housebuilders, with Persimmon off 7.5p at 662.5p and Wilson Bowden weakening 5p to 1100p, despite the latter reporting record first half profits.

Back in the Footsie, defence giant BAE Systems added 4.5p to 205p after a broker said BAE was well-placed to benefit from high oil prices, a civil aerospace recovery and good underlying growth in its defence business.

Tech company LogicaCMG was near the top of the FTSE 250 risers, surging nearly 4% or 6p to 166.5p, after unveiling half-year figures in line with expectations.

AB Ports lost early gains to end the day 0.75p off at 430p, despite reporting a solid first half and plans to redevelop its Humber terminal.

Shares in Manchester United slipped 2.5p to 259p as details emerged of the club’s deal for England striker Wayne Rooney.

However, building and engineering group Costain picked up 1.25p to 42.5p after announcing deals with water companies worth a potential £750m and a 33% rise in interim profits.

The biggest risers were Land Securities, up 40p to 1190p, Amvescap increasing 8.5p to 298.5p, British Land adding 17p to 736.5p and Smiths Group gaining 16p to 710p.

The biggest fallers were William Hill, down 5.5p to 538p, Yell off 3.25p to 337.5p, Tesco down 2.5p to 263.5p and Sainsbury slipping 2.25p to 258p.

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