Footsie continues to gain ground

Telecoms and drugs stocks helped the FTSE 100 Index edge further beyond the key 5100 barrier today.

Telecoms and drugs stocks helped the FTSE 100 Index edge further beyond the key 5100 barrier today.

Progress by the likes of O2 and AstraZeneca contributed to the Footsie ending the session 4.1 points higher at 5113.2, the best performance for the first half of the year since 1999.

The extension of its recent rally left the top flight 300 points higher than its opening mark at the start of January.

Rumours that O2 might be in the sights of venture capitalists or overseas telecoms groups made it the top blue-chip performer with a 4p rise to 136.25p. BT Group was also in the black, adding 1.75p to 230p, although Vodafone lost earlier gains to slip a penny to 136p.

Progress by the market came in spite of official data which showed the UK economy growing at a slower pace than first thought.

In a surprise set of figures from the Office for National Statistics, GDP was revised down to 0.4%, from 0.5%, for the first three months of the year.

But analysts said the data could help the market if it persuades the Bank of England to cut the cost of borrowing soon.

There was no momentum from shares across the Atlantic, where the Dow Jones Industrial Average was virtually unchanged ahead of tonight’s announcement on US interest rates.

Pharmaceuticals firms were helping the London market to kick on with AstraZeneca the second highest riser, improving 44p to 2311p and GlaxoSmithKline up 3p at 1351p. Electricals chain Dixons benefited from broker Merrill Lynch upgrading the stock to neutral from sell after approving of the way management is tackling its cost base. Dixons shares rose 2.5p to 157p.

In contrast, Enterprise Inns lost 13p to 834p on a report that the UK’s biggest pubs operator had pulled out of talks with a private equity firm over a joint bid for rival pubs chain Spirit.

A fresh fall in the cost of crude in the wake of a surprise increase in oil inventories across the Atlantic, which eased fears of a summer shortage of supplies, put investors off oil giant BP. Its shares dropped 1% or 6p to 581p.

FTSE 100 hopeful PartyGaming bounced 10p to 149p on the first day of full trading in the online poker firm. Its shares were cautiously priced at 116p at the start of this week.

Outside the top flight, packaging specialist DS Smith weakened nearly 3% or 4p to 146p after it flagged uncertainty over whether the benefits of recent acquisitions will be able to offset recent rises in energy and raw material costs.

And newspaper group Trinity Mirror retreated 8.5p to 618p as it signalled a decline in advertising revenues and warned the market was likely to remain extremely challenging.

The highest Footsie risers today were O2 adding 4p to 136.25p, AstraZeneca up 44p to 2311p, Royal & Sun Alliance rising 1.5p to 83.75p and Next up 27p to 1509p.

The heaviest fallers were BOC down 21p to 1004p, Enterprise Inns off 13p to 834p, Hays down 1.75p to 129.5p and British Airways off 3.5p to 263.5p.

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