FTSE breaks 5500

Stronger mining stocks and a better-than-expected update from Alliance & Leicester gave the FTSE 100 Index reason to break the 5500 barrier today.

The London market settled at 5508.8 by mid-morning, up 22.7 after an uncertain start to the session saw it fluctuate between a gain of 33 points and a modest drop into negative territory.

Triple-digit gains on Wall Street helped sentiment, while the mining sector was on the front foot with RioTinto ahead 91p at 2493p and Xstrata up 40p at 1390p.

The major corporate news came from A&L after it indicated that the market’s consensus of £506m (€746m) for annual operating profits was too low. Shares in A&L lifted by 22p to 922p – their highest level for nine months.

Only Northern Rock, up 1.5p to 845p, managed to track A&L, while the rest of the banking sector gave back earlier gains with Royal Bank of Scotland 7p lower at 1669p and Lloyds TSB off 1.5p at 470.75p.

The market would have risen further had a clutch of heavyweights not gone ex-dividend, meaning shareholders have lost the right to the most recent payout.

Supermarkets were among those to suffer for this reason with Morrisons losing 1.5p to 177.25p, Sainsbury’s falling 1.75p to 287p and Tesco weakening 2.75p to 305.25p.

Vodafone also went ex-dividend but its shares were hurt more by broker Credit Suisse First Boston reducing its recommendation on the stock to neutral and lowering its target price. Shares in the mobile phone giant fell 2.25p at 123.5p.

Elsewhere, electronics maker Alba hauled back losses of 4% earlier in the session to stand 4.25p higher at 349p, even though it posted losses of £6.6m (€9.7m) for the first half of its financial year.

And Wolverhampton & Dudley Breweries slipped 28p to 1234p but posted higher annual profits as it indicated its record of sales growth was under threat from weaker consumer confidence.