FTSE adds to yesterday's gains

The London market added to yesterday’s bumper rally today despite a negative reaction to some of the latest corporate news.

The FTSE 100 Index cheered 19.5 points to 5336.8 by mid-morning despite fears that investors may use the session as an opportunity to bank profits.

It followed a rally in Asia, where the Hang Seng in Hong Kong and Japan’s Nikkei enjoyed triple-digit gains, and more modest gains of 37 points by New York’s Dow Jones Industrial Average overnight.

In London, airports operator BAA and Imperial Tobacco both fell into the red as their latest updates failed to inspire investors.

BAA weakened 3p to 610.5p as analysts expressed concerns that capacity constraints at Heathrow were limiting its ability to capitalise fully on the boom in air travel. It followed news of 700 job cuts and a 9.6% rise in half-year operating profits.

Imperial Tobacco fell 21p to 1599p after record profits of £1.13bn (€1.66bn) were clouded by fears over shrinking volumes in its major markets of the UK and Germany.

Telecoms giant O2 slipped half a penny to 205.25p, settling slightly following yesterday’s announcement of a planned £17.7bn (€26bn) takeover deal by Spain’s Telefonica. But rival Vodafone was in positive territory, rising 2p to 150.25p.

Property firms were among those driving today’s improvement after broker JP Morgan reviewed its ratings on UK real estate firms. Hammerson was the highest top flight riser, climbing 35p to 927p after JP Morgan upgraded the stock, while British Land rose 25p to 915p for the same reason.

Friends Provident lifted 0.75p to 177p after saying a new drive to sell protection products through banks and building societies may boost under-pressure sales of mortgage-related products.

Elsewhere, clothing retailer Matalan fell 3% or 4.75p to 160.25p after sales wilted over the past nine weeks, which featured the unusually warm weather in October.