UK investors push FTSE up by 40 points

Investors in the UK piled into banking and housebuilding stocks following optimistic comments from lender Northern Rock and developer Crest Nicholson today.

A recovery from mobile phone group Vodafone also boosted sentiment as the FTSE 100 Index reached mid-morning 40.3 points stronger at 5674.1.

Northern Rock got the banking results season off on the right note after posting profits at the top end of expectations and forecasting a similar improvement in the year ahead.

With bad debts also appearing to be under control, investors had every reason to buy into sector heavyweights such as HBOS, which gained 12p to 962.5p, and Barclays – ahead 4.5p at 592p.

Northern failed to benefit – down half a penny at 937.5p – as analysts said its shares had been on a strong run recently.

The comments from Northern about a pick-up in the housing and mortgage markets were echoed by Crest Nicholson after the developer said underlying profits fell in line with forecasts and that it was cautiously optimistic for 2006.

The specialist in brownfield projects rose 2%, or 8.5p to 470.5p, while top flight stock Persimmon added 3% or 36p to 1258p and George Wimpey rose 26.75p to 517.5p in the second tier. Taylor Woodrow was up 16.25p to 401.25p.

Back in the FTSE 100 Index, BOC shares topped the risers board for a second successive session after German company Linde last night confirmed it approached the industrial gases group about an offer worth £15 a share, equivalent to £7.6 billion. BOC rejected the interest, but shares still rose 75p to 1469p, following yesterday’s 20% improvement.

Vodafone recovered 2% after losses of 3% yesterday extended the stock’s recent poor run. Today’s rally reflected hopes that chief executive Arun Sarin may yet sanction the sale of the company’s 45% stake in US mobile phone company Verizon Wireless.