Footsie closes above 5000 mark

A surge in shares across the Atlantic helped the FTSE 100 Index close above the 5,000 barrier for the first time since mid-March today.

Gains by oil majors after the cost of a barrel of US light crude hit a three-week high also contributed to the Footsie closing 47 points higher at 5011.

Significant momentum came from the United States, where the Dow Jones Industrial Average advanced more than 110 points by the close in London.

The Footsie was also lifted by manufacturing figures at home, as the data reduced concerns about further rises in interest rates.

Figures from the Chartered Institute of Purchasing & Supply showing the fastest decline in the manufacturing sector for more than two years in May increased speculation that rates may have peaked at 4.75% and could even be reduced.

BP and Shell both made significant progress as the cost of a barrel of crude rose above 52 US dollars in New York by the end of the day. BP added 2% or 11p to 562p, while Shell advanced 9p to 486.5p, a rise of nearly 2%.

Banking shares were holding firm after Halifax Bank of Scotland said bad debts were rising in line with expectations. It also reported “good trading in calmer markets”, helping shares lift more than 1% to be 11.5p higher at 812p.

Among its rivals, Royal Bank of Scotland rose 14p to 1630p, Barclays cheered 7p to 528.5p, Northern Rock moved 15p higher to 752.5p and Lloyds TSB lifted 7.5p to 460.5p.

National Grid Transco cheered 6.25p to 543.75p after saying it had completed the £5.8 billion sale of four of its regional gas distribution networks, meaning it will return £2 billion to investors as already announced.

However, a clutch of stocks going ex-dividend – meaning they no longer carry the right to the most recent dividend payment – limited the Footsie’s advances.

Fallers included Marks & Spencer, which slipped 1% or 3.5p to 334p and Boots, off 11p at 595p. Vodafone, which is one of the market’s biggest stocks, was 1.75p lower at 137p after also going ex-dividend.

Outside the top flight, Northern Foods was a penny lower at 155.75p following its announcement of a 6.7% fall in annual underlying profits.

Magazine publisher Emap lost 2.5p to 802p after newspaper and radio group Scottish Radio Holdings rebuffed a proposed £374 million takeover approach.

However, SRH gained nearly 14% or 127.5p to 1000p, a rise of nearly 15%, as investors welcomed the decision by company’s board.

Shares in civil engineer John Laing added a penny to 247.5p following its announcement of a £100 million rights issue to fund expansion.

The highest Footsie risers today were BG Group up 12.25p to 429p, Reckitt Benckiser lifting 47p to 1727p, Carnival adding 81p to 3086p and Amvescap up 8.5p to 331p.

The heaviest fallers were BSkyB down 10p to 535.5p, Boots losing 11p to 595p, Old Mutual down 2p to 116p and Scottish Power off 6.5p to 457p.