FTSE boosted by falling oil prices

Falling oil prices and a positive start to trading in New York helped London shares to finish the day with healthy gains.

The FTSE 100 Index retreated a little from its 57-point intraday high, but closed 49.6 points to the good at 4673.8.

US light crude oil for December delivery dipped below the $50 a barrel mark for the first time since October 5 on expectations that US heating oil supplies would be enough to meet winter demand.

Although uncertainty about the outcome of tomorrow’s presidential poll was still causing market jitters, the Dow Jones Industrial Average was trading nearly 36 points ahead shortly after London’s close.

In London, economic news was boosting shares, with a survey showing the rate of growth in manufacturing increasing for the first time since July.

On the corporate front, rumours that Royal Mail chairman Allan Leighton was lining up an offer for struggling supermarket chain Sainsbury’s lifted its stock to the top of the Footsie, up nearly 4% or 9.5p to 267.25p.

Reports claimed former Asda chief Mr Leighton has funds in place for a takeover and is poised to make a 300p a share offer within weeks.

Mining groups BHP Billiton, Anglo American and Antofagasta were not far behind Sainsbury’s as investors decided that the stocks were oversold.

BHP was third in the risers with a 14p advance to 567.5p while Anglo put on 24p to 1218p and Antofagasta advanced 16p to 1014p.

Aerospace and defence group BAE Systems was also in the money, gaining 5p to 243.25p after the Dutch defence ministry confirmed that it had chosen the firm’s Alvis-Hagglunds unit to supply 184 armoured vehicles.

Only two companies were in negative territory. The heaviest faller was personnel group Hays, off 7% or 9.25p to 119.5p as it confirmed it had demerged its mail business. Intercontinental Hotels was the other loser, dipping a penny to 665.5p.

British Airways recovered lost ground to end the session 0.75p ahead at 216p on the back of the falling oil price.

Outside the top flight, entertainment group Sanctuary rose 1.75p to 43.5p as it revealed that trading in the last financial year had been strong.

Leisure group Rank made up earlier losses to put on 1p to 287p amid reports it has begun plans to demerge and float its film business in a move that could value the division at around £600m (€862.6m).

And shares in Marconi weakened more than 2%, off 11.5p to 518.5p, after it emerged one of the key figures in its recovery is to leave the telecoms group after failing to find a post-restructuring role within the business.

The day’s biggest winners were Sainsbury’s, up 9.5p to 267.25p, Smith & Nephew gaining 13.5p to 476p, BHP Billiton lifting 14p to 567.5p and Bunzl adding 9.25p to 422p.

Largest losers included Hays, down 9.25p to 119.5p and Intercontinental Hotels, off a penny at 665.5p.