FTSE in sight of 5000 barrier

The FTSE 100 Index was within striking distance of the 5000 barrier today, after soaring to its highest level since June 2002.

Further gains for mining stocks and a strong performance by US markets helped push the top flight index 38.3 points higher to 4979.8.

Positive news in a court case involving a group of tobacco firms also prompted the rise, as the market value of blue chip stock British American Tobacco lifted 3%.

London shares were bolstered by recent heavy gains in New York, although the Dow Jones Industrial Average made more modest progress today, advancing 10 points by the end of the day in London.

British American Tobacco was the third highest Footsie riser – up 30p to 972.5p as investors welcomed a US court decision clearing tobacco firms of liability in a major civil claims lawsuit in Washington.

Mining stocks made gains as the prospect of strong demand and prices continued to bolster the sector. BHP Billiton was 18p higher at 681p, Antofagasta rose 39p to 1270p and Anglo American cheered 23p to 1307p.

Rumours that Tate & Lyle could win a contract to supply artificial sweetener to Diet Coke prompted a 7% hike in the sugar group’s share price. Tate & Lyle was top of the risers, up 33p to 501p.

Telecoms group Cable & Wireless also made good progress, advancing 4.25p to 127.5p.

Shareholders gave a cautious welcome to news that pest control-to-hygiene group Rentokil Initial had poached Australian Doug Flynn from marketing services group Aegis to lead the group. The stock initially rose but later fell back 1.25p to 153.5p.

Much of the interest was focused on the FTSE 250 Index, particularly music giant EMI after its shares slumped 16% – 46.25p to 235p – on the back of news that two key albums would not be released in the current financial year.

Car dealer Reg Vardy was down 25.5p at 504.5p after it warned of a subdued new car market, but Manchester United shares were up 5% – 12.75p to 281p – after the club confirmed a new takeover proposal from sports tycoon Malcolm Glazer.

Budget airline easyJet fell 4.25p to 227.75p as it warned that the outlook remained uncertain despite passenger numbers soaring by almost a quarter last month.

Elsewhere in the travel sector, struggling car hire group Avis Europe lifted 5.5p to 58.5p on speculation of a takeover approach.

And housebuilders benefited from hopes that the sector may not be as hard hit by the market slowdown than initially feared. Persimmon rose 15.5p to 765p while retirement specialist McCarthy & Stone cheered 19p to 635p.

Meanwhile, sofa specialist ScS Upholstery added 23p to 383.5p after saying the collapse of furniture chain Courts helped drive shoppers into its stores during the January sales.

The highest Footsie climbers today were Tate & Lyle up 33p to 501p, Cable & Wireless rising 4.25p to 127.5p, British American Tobacco up 30p to 972.5p and Antofagasta rising 39p to 1270p.

The heaviest fallers were Centrica off 5p to 243p, United Utilities down 11.5p to 643.5p, British Airways off 3.75p to 270.75p and National Grid Transco down 6.25p to 523.5p.