Telecoms keep FTSE on the up

The telecoms sector ensured the FTSE 100 Index remained in the ascendancy today following a positive update from mobile phone operator O2.

Shares in O2 were top of the charts in London after it cheered the market by raising its guidance for UK revenues over the full year and said growth in its Irish and German businesses had also continued over the summer.

With oil stocks benefiting from a sharp pick-up in the cost of crude yesterday, the Footsie lifted 15.2 points to 5468.3 by mid-morning to stay on course for another four-year high.

Despite bid speculation having inflated the share price of O2 in past weeks, the telecoms firm rose 2% or 3.25p gain today to match its best-ever mark.

News that it was attracting customers from rival networks initially depressed shares in Vodafone, but the UK’s biggest mobile phone group recovered to stand 0.75p higher at 149.5p. In the FTSE 250 Index, Virgin Mobile was unchanged at 275p.

In the oil sector, BP and Royal Dutch Shell rose on talk among traders that production stoppages in the US following Hurricane Rita might take longer than expected to resolve.

Oil prices rose to within a whisker of 66 US dollars a barrel in trading yesterday, helping BP and Shell to advance 11p and 33p to 674p and 1946p respectively.

But the recent rally by cigarette makers ran out of puff as British American Tobacco dropped 18p to 1187p, Imperial Tobacco fell 17p to 1574p and Gallaher faded 9p to 869p.

Elsewhere, computer games retailer Game weakened 2.5p to 84p after seeing first-half losses widen and it suffered problems in replenishing stocks of the new Sony PSP console.

Pilkington headed the fallers in the FTSE 250 as investors used a trading update, which confirmed it was on course to meet hopes for its annual results, to bank profits. Shares in the glass maker fell more than 3% or 5p to 139p.