Footsie edges towards 5000 mark

The London market ended the day just shy of the key 5000 level after takeover talk surrounding Whitbread buoyed spirits.

Shares in the leisure group led progress in the FTSE 100 Index, which closed 23.4 points up at 4994.9.

Whitbread added nearly 9% to its market value, up 75p to 925p, after reports claimed private equity bidders were interested in breaking up the pubs and hotels group, whose brands include Premier Travel Inn and Brewers Fayre.

In the United States, the Dow Jones Industrial Average lifted 61 points after the US government said the economy expanded in the first quarter at a faster pace than initially estimated.

Homebuilders including Toll Brothers and chipmakers such as Intel led the progress.

On another busy day for corporate news in the City, Cable & Wireless also featured high in the top flight risers after reporting progress since its restructuring.

The telecoms carrier, which has shed thousands of jobs in recent years, said it achieved bottom-line profits of £363 million in the year to March 31, compared with losses of £224 million. Shares advanced nearly 6% or 7.25p to 136.5p

It was followed by broadcaster ITV, 3p higher at 118.25p after it told its annual meeting that revenues for the first half were expected to be 3% higher than the same period last year. Although this was slower than growth of 4.7% for the whole of last year, it was better than the market was expecting.

BP and Shell were both more than 1% ahead as the cost of a barrel of US light crude for July delivery increased by 32 US cents in futures trading to 51.30 US dollars. BP added 8.5p to 560.5p and Shell advanced 5.5p to 487.5p.

In contrast, Barclays was the biggest top flight loser, down 4% or 22p to 528p, after saying its bad debts were rising more than the bank had expected, despite strong first quarter income growth.

Rivals followed it down, with HBOS off 19.5p to 806.5p, Royal Bank of Scotland losing 53p to 1606p, Lloyds TSB weakening 8p to 458p, Northern Rock retreating 18.5p to 745p and Alliance & Leicester drifting 9.5p to 852.5p.

Retail group Kingfisher saw its shares rise 4.75p to 261.75p despite reporting a 16% fall in profits at B&Q amid “challenging” recent trading.

Pest control-to-pot plants group Rentokil Initial was also in the Footsie fallers, declining 1% or 1.75p to 154.5p after saying profits had fallen 16% in the four months to the end of April.

Outside the top flight, glass maker Pilkington lifted 2.25p to 118.75p as it posted a 26% rise in annual profits after cost-cutting measures helped it combat tough trading conditions.

Biggest top flight risers were Whitbread, up 75p to 925p, Man Group gaining 83p to 1306p, Cable & Wireless lifting 7.25p to 136.5p and AB Foods advancing 28p to 798p.

Biggest fallers included Barclays down 22p to 528p, Royal Bank of Scotland off 53p to 1606p, Northern Rock easing 18.5p to 745p and HBOS losing 19.5p to 806.5p.