BA news good for FTSE

A positive update from British Airways helped the FTSE 100 Index extend its recent rally today.

The Footsie looked on course to hit its highest closing level in two-and-a-half years after lifting 21 points to 4929.3 by mid-morning.

Shares in BA gained height after the airline raised its full-year revenue guidance despite a 40% fall in third-quarter profits.

The airline said it expected a 3% to 3.5% improvement in total revenues for the year to March 31, making it the second highest Footsie climber with a hike of 6.75p to 277.25p.

Another major driver was drinks group Allied Domecq, which was at the top of the risers board as talk circulated about a possible takeover by France’s Pernod Ricard. The stock lifted 4% or 22p to 514p.

Investors were not put off by a negative session across the Atlantic last night, where the Dow Jones Industrial Average finished the day 3.7 points off at 10593.1.

Analysts said non-farm payroll figures out later today in the US would be likely to give the market direction.

Back in London, miners gave up some of their recent gains, with Xstrata weakening 6.5p to 997.5p after Australian group WMC Resources rebuffed its revised takeover bid. BHP Billiton eased 8p to 664.5p and Rio Tinto was 9p lower at 1646p.

Oil giant Shell clawed back some of yesterday’s losses prompted by its latest reserves downgrade. The stock lifted 6.75p to 478.5p, while rival BP added 3p to 537p.

Outside the top flight, gym operator LA Fitness was unchanged at 257.5p after saying it had performed in line with hopes despite “aggressive” competition to sign up users in the New Year.

And the London Stock Exchange retreated 4p to 566.25p after City watchdog the Financial Services Authority warned of “significant” implications for the LSE if a future owner moved it to another country.