FTSE rally keeps two-year record in sight

The FTSE 100 Index was today on course for its highest finish in more than two years after strong gains by mining stocks.

Investors showed no inclination to sit on their hands during a slow day for corporate news and sent the Footsie 34.9 points higher to 4591.4 by mid-morning.

And if this form is maintained for the rest of the session then the top-flight will close at its highest mark since July 2002.

Tom Hougaard, chief strategist at City Index, said sentiment was being driven by the likely success of George W. Bush in the US presidential elections and a positive outlook for 2005.

If blue-chip shares broke through the 4600 support level then investors would then set their sights on passing the next key milestone at 5100, he said.

“But that’s a pretty tall order as we are talking about a 12% gain over the next three months,” Mr Hougaard said.

London shares overcome a cautious start and concerns over volatile oil prices that limited gains in New York overnight.

Mining groups occupied three of the top five spots on the Footsie risers board with Anglo-American up 34p at 1297p, BHP Billiton advancing 14p at 551.5p and Rio Tinto ahead 32p at 1442p.

But the big news of the day came from FTSE 250 food retailer Big Food Group which announced a takeover approach in the region of 110p a share.

The owner of Iceland frozen food stores and cash-and-carry chain Booker accelerated 12% or 11p to 103.25p on news of the potential bid, thought to be from Icelandic retail group Baugur.

Elsewhere, the Competition Commission said it had approved National Express’s takeover of the Greater Anglia rail franchise after finding that the merger would not lessen competition.

But investors were unimpressed, particularly as the stock went ex-dividend, sending its shares down 9.5p to 689p.

Shares in online bookmaker ukbetting were unchanged at 50p, despite first-half losses had narrowing to £1.6m (€2.4m).