Strong gains for FTSE

A bid approach for Exel and positive results from drinks giant Diageo helped the FTSE 100 Index post strong gains for a third session in a row today.

Plans by Cadbury Schweppes to sell its European drinks arm added to the mix, as the Footsie rose 31.6 points to 5328.5 by the close of trading.

Energy stocks again underpinned the latest improvement as oil prices near 70 US dollars a barrel enabled market heavyweight Royal Dutch Shell to lift 16p to 1897p and rival BP to rise by 5.5p to 637.5p.

But the main excitement of the session concerned deal-making after news of an approach from DHL owner Deutsche Post pushed Exel up by 17% – a jump of 173.5p to 1178.5p. That valued the logistics group at more than £3bn (€4.4bn), with potentially more to come if the likes of UPS or TNT enter the fray.

Cadbury Schweppes also got a warm reception for its plans to sell a division featuring Oasis and Orangina, which is valued at more than £1bn (€1.5bn).

The confectionery group, which rose almost 3% or 14p to 561p, was also helped by positive sentiment from good results from drinks firm Diageo.

The Guinness-to-Johnnie Walker owner gained 2% or 13p to 805p after revealing signs of an end to the downturn in sales of its ready-to-drink products such as Smirnoff Ice. The company also posted a 2% hike in annual operating profits and proposed a £1.4bn (€2bn) share buyback programme in the current financial year.

Others in the sector to benefit included Enterprise Inns, which rose by 28.5p to 854.5p, and brewer SABmiller, which was up 20p at 998.5p.

Oil prices were supported by the loss of production in the United States following Hurricane Katrina, which also led investors to buy shares in companies that could benefit from construction and relief work in southern states.

Building materials firm Wolseley advanced 3% or 31p to 1159p, while temporary power specialist Aggreko climbed 8% or 15.75p to 225p in the second tier. Plant hire group Ashtead was also up 8.5p to 130.5p.

On the downside, Whitbread topped the Footsie fallers board after sales figures showed a weakening trend. Shares fell 17p to 977.5p, a drop of 2%.

Outside the top flight, car rental group Avis Europe achieved a much-needed rise after announcing progress on its recovery plan. Shares rose 3.25p to 53p, even though the company posted a sharp fall in half-year profits.

Budget airline easyJet rose 3.25p to 295p as investors took a positive view of the appointment of former RAC boss Andrew Harrison as its new chief executive.

But retailer Whittard of Chelsea slumped 14% – or 12p to 75.5p – after it said that potential takeover bidders had walked away from talks to buy the company. The stock fell 10% last week following a gloomy trading update.

The biggest Footsie risers were Exel up 173.5p at 1178.5p, BOC ahead 37p at 1084p, Enterprise Inns up 28.5p at 854.5p and Capita Group ahead 10.25p at 374.5p.

The biggest fallers were Whitbread down 17p at 977.5p, Carnival off 34p at 2839p, Sage down 2.5p at 226p and Alliance UniChem off 9p at 816p.