FTSE scores 29-month high

The FTSE 100 Index soared to a 29-month high today as fresh hopes that interest rates will stay on hold for the rest of the year and lower oil prices cheered investors.

The FTSE 100 Index soared to a 29-month high today as fresh hopes that interest rates will stay on hold for the rest of the year and lower oil prices cheered investors.

Telecoms stocks were among the biggest risers as the Footsie climbed 42.4 points to 4776.9 – its highest close since June 2002.

Traders took heart from figures from the National Association of Estate Agents (NAEA) showing that the average property price in the UK fell 1.6%, its fifth consecutive monthly fall.

House prices are now on average 6.05% higher than they were this time last year – the lowest annual rate of change seen since the property boom began, the NAEA said.

David Fineberg of City stockbroker deal4free.com said: “The fear of another interest rate rise this side of Christmas seems to have cooled.”

The market was buoyed by a fall in the cost of a barrel of crude in New York below the $48 mark, as growing US inventory stocks eased fears over winter supplies.

Trading across the Atlantic also lent support, with the Dow Jones Industrial Average around 40 points higher by closing time in London.

In London, BT was high in the Footsie risers with a 6p jump to 199.25p after saying rising demand for broadband had helped it to its fastest underlying revenues growth in nearly three years.

Cable & Wireless added to yesterday’s significant gains by climbing another 2% - up 3.25p to 119.75p – as investors continued to cheer its announcement on restructuring plans and a share buyback programme.

But the biggest gains by telecoms stocks came from mmO2, 3.25p higher at 107.5p, making it the third highest Footsie climber.

Insurer Prudential advanced 7.5p to 426p after reporting a 92% take-up for its controversial rights issue.

However, rival Royal & Sun Alliance was nearly 3% or 2.25p down at 76.25p despite reporting a substantial rise in nine monthly operating profits to £453m (€646.7m).

Outside the top flight, Booker-to-Iceland group Big Food lifted 2.75p to 95p after saying pensions issues that threatened to scupper a possible takeover by Icelandic retailer Baugur had been resolved in principle.

This helped soften the blow of half-year losses hitting £9m (€12.8m) against profits of £2.8m (€4m) last time.

Elsewhere, Punch Taverns lost its earlier froth despite reporting “excellent” pre-tax profits before one-off items of £156m (€222.6m) in the year to August 21 against £113m (€145.9m) previously. The pubs group was 5.25p down at 569.75p.

Logistics group Wincanton failed to win over investors with news that contract wins with a string of high-profile firms boosted its market position as it posted a 22% rise in underlying profits. Shares in the group fell 7.75p to 255.5p.

The highest Footsie risers today were Hays up 6.25p to 127.5p, Reuters adding 12.25p to 389p, mmO2 up 3.25p to 107.5p and BT rising 6p to 199.25p.

The heaviest fallers were Royal & Sun Alliance down 2.25p to 76.25p, United Utilities losing 7p to 556p, National Grid Transco off 3.75p to 468.75p and Allied Domecq down 3.25p to 520.25p.

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