FTSE lifted to highest level in four years

The FTSE 100 Index lifted to its highest level since July 2001 today as traders returned to their desks in good spirits.

Oil and mining stocks led the way as the London market looked to build on impressive gains in 2005 which saw shares outperform house prices for the first time this century.

The row between Ukraine and Russia over gas supplies led to a wave of buying in oil and gas explorers as the top flight cheered 55.9 points to 5674.9 by mid-morning.

BG Group was the day’s most impressive performer, up 4% or 20.5p to a record high of 595p. Its shares were tracked by Cairn Energy, up 50p to 1970p, Royal Dutch Shell 34p better off at 1892p and BP, which ticked up 10p to 629p.

Mining stocks were also in good shape after analysts correctly called the sector to be a hotspot in London after shares in commodity companies jumped in overnight trading in Australia.

Kazakhmys was the strongest riser – up 26.5p at 800 – its highest level since floating in October. It was followed north by Xstrata, which lifted 40p to 1400p, while Antofagasta cheered 48p to 1917p and BHP Billiton put on 15.5p to stand at 965p.

Also in positive territory was mobile phone giant Vodafone as it looked to improve on last year’s disappointing performance in its share price. The stock lifted 2.5p to 128p after a string of broker tips over New Year.

Retailers were proving less popular, with Marks & Spencer down 1.75p to 503.25p, Tesco off 1.25p to 330.25p and Kingfisher sliding 1.5p to 235.75p.

It came on the back of worries over the post-Christmas sales, although Dixons owner DSG International bucked the trend to move 3.75p up to 167.5p.

Elsewhere, Electra Investment Trust was up nearly 7% or 75p to 1195p after it agreed to sell its UK marine management business Inchcape Shipping Services to Dubai for £165m (€240m).

William Hill shares surged 6% or 32.5p to 568p after the bookie said profits for last year would be above expectations as it looked forward to a strong 2006 buoyed by betting on the football World Cup in Germany.