London forward edges ahead

The London market made modest gains today after lower oil prices offset the negative impact of several stocks going ex-dividend.

The FTSE 100 Index circled its opening mark for most of the session before closing 4.5 points up at 4947.4.

There was bright news for firms on energy costs, with the price of a barrel of US light crude for May delivery trading at 55.7 US dollars, down 34 cents, in late afternoon trading.

The Dow Jones Industrial Average added 55.5 points shortly after London’s close in the wake of the drop in oil prices and bond yields. Shares in Citigroup - the world’s largest bank – rose while chipmakers Altera and Broadcom lifted following a buy recommendation from broker Merrill Lynch.

Back in London, Financial Times publisher Pearson was one of a quartet of blue-chip firms high among the Footsie fallers after investors lost the right to the most recent dividend payments.

The worst faller was classified advertising directories group Yell, which continued to lose ground after yesterday’s news that the Office of Fair Trading had ordered an investigation into competition in the directories market. JP Morgan downgraded the stock to neutral from overweight, sending the shares nearly 4% or 16.5p lower to 406.25p.

Bid rumours that swirled around Allied Domecq firmed yesterday when the drinks group confirmed a takeover approach from French group Pernod Ricard.

Shares in Allied, which closed 18% higher last night, rose in early trading before slipping back as investors banked profits to stand unchanged at 633p.

Building materials group Hanson eased 13.5p to 484.5p after going ex-dividend. The same reason explained the 5p fall of insurer Friends Provident to 173.25p and publisher Pearson, which eased 20.5p to 634.5p.

Shares in logistics group Exel hit their highest level since the spring of 2002, up 12p to 897.5p, as investors speculated that it could be the next blue-chip stock to attract takeover interest.

Airline stocks benefited from the fall in oil prices, with British Airways lifting 5.5p to 267.5p and easyJet adding 6p to 214.75p.

Aerospace group Rolls-Royce advanced 5p to 253p after it said it had signed a deal with a Singapore-based consortium to invest 100 million US dollars in developing a power system based on fuel cell technology.

Computer games group Eidos gained 0.5p to 76.75p after rival SCi Entertainment stepped up its pursuit of the group by persuading two more investors to back its £101.4 million bid.

Elsewhere, a trading update from discount chain Peacock provided a rare boost for the retail sector as it posted an improving sales trend in the first three months of the year. While business at its bonmarche chain was less positive, shares still surged 3% or 8.25p to 258.25p.

Department stores group James Beattie was another riser, up 6% or 7p to 120p, despite posting a fall in annual profits.

The day’s biggest risers included Schroders NV up 20.5p to 681.5p, Antofagasta gaining 36p to 1255p, Schroders adding 15.5p to 740.5p and British Airways advancing 5.5p to 267.5p.

Largest fallers were Yell, down 16.5p to 406.25p, Pearson losing 20.5p to 634.5p, Friends Provident off 5p to 173.25p and Alliance & Leicester weakening 24.5p to 871.5p.