FTSE breaks through 5000 barrier

The FTSE 100 Index bounced back from gloom caused by a profits warning from Boots today to break through the key 5000 barrier.

The warning weighed on a series of retailers and helped drag the index lower early in the day – but positive updates from the likes of British American Tobacco lifted spirits later on.

Investors also shrugged off the prospect of higher interest rates, helping the Footsie closed 32 points higher at 5000.5.

Upbeat housing market figures from the Nationwide building society heightened speculation about a rate hike. The Nationwide said property prices rose by 0.5% in February as annual house price inflation eased to 10.2%.

But that was tempered somewhat by a survey from the the Chartered Institute of Purchasing and Supply (CIPS) that showed manufacturers facing a loss of profitability and export orders.

Events across the Atlantic also provided some momentum, with the Dow Jones Industrial Average around 50 points higher by the Footsie’s close.

In London, health and beauty chain Boots was the heaviest top-flight faller, dragging down other blue-chip stocks such as Next and GUS, after saying trading since its last update in January had deteriorated further.

Boots lost 4% of its value, down 27.5p to 636p. It now expects annual operating profits for its core Boots the Chemists chain to be between £465 million and £475 million, against the previous forecast of £490 million to £500 million.

Retailers following it into the red included Next, which slipped 10p to 1531p, and Argos owner GUS, off 2p to 940p.

Another faller was personnel group Hays, which lost 5.25p to 129p after warning that a record performance in its key recruitment arm would be harder to beat in future years.

In contrast, Friends Provident added 4%, up 6.5p to 170.75p, after saying it would sell its products through Barclays’ new financial advice service, which is to be launched later this year. Barclays was more than 1% higher, up 9.5p to 574.5p.

British American Tobacco also helped to lift the market as it announced a 20% increase in profits and said it planned “substantial” savings in its supply chain. The stock advanced 21.5p to 976.5p.

And pubs and hotels group Whitbread lifted more than 1% or 9.5p to 912p after saying its David Lloyd Leisure fitness clubs had continued to deliver “creditable” sales growth despite membership falling.

Elsewhere, convenience foods group Uniq lost 9% of its value after a potential takeover collapsed over a £100 million hole in its pensions fund.

Uniq said talks with a potential bidder had been terminated on fears that a takeover would saddle the company with too much debt, sending the stock down 15p to 157.5p.

The highest Footsie climbers today were Schroders up 45p to 781p, Amvescap rising 16p to 357p, Friends Provident up 6.5p to 170.75p and British Airways rising 9.25p to 276.75p.

The heaviest fallers were Boots off 27.5p to 636p, Hays down 5.25p to 129p, BHP Billiton falling 17.5p to 759p and Xstrata off 20.5p to 1073.5p.