Footsie starts week on a high

A sharp rise by Vodafone and the possibility of two more heavyweight deals re-ignited the FTSE 100 Index’s push towards the 6000 barrier today.

Upbeat broker notes and renewed speculation over the future ownership of BAA added to the heady mix as the Footsie rose another 44.9 points to close at 5952.8 – a level not seen for almost five years.

Vodafone moved 5p higher to 129.75p, an improvement of 4%, amid signs that the mobile phone giant may get more than expected for its Japanese arm.

Sentiment was also boosted by speculation over possible bid interest in Vodafone’s US holding, while investors cheered signs that key figures at the group were rallying behind under-pressure chief executive Arun Sarin.

But two potential deals in the FTSE 250 Index did as much to boost sentiment after interest in the London Stock Exchange and Mitchells & Butlers.

LSE shares soared 31% or 269p to 1149p – well above the proposed price of 950p offered by New York-based exchange Nasdaq last week. Details of the approach emerged after the market closed on Friday and immediately prompted speculation that a rival offer could come in from the New York Stock Exchange.

Mitchells & Butlers jumped towards the end of the session after the investment vehicle of tycoon Robert Tchenguiz revealed its interest in putting together a consortium to bid for the 2,000 strong pubs chain. That lifted Mitchells shares by 19% or 77p to 490p, while top flight rival Enterprise added 33.5p to 926p.

Enterprise was second on the risers board and ahead of BAA after it was reported that Australian bank Macquarie was mulling an offer to rival interest from Spanish firm Ferrovial. Shares were up another 16p to 830p.

Broker notes benefited a number of stocks with B&Q owner Kingfisher ahead 8p at 239p and InterContinental Hotels up 24.5p to 860p after Morgan Stanley improved its rating of the stock.

And UBS prompted shares in Royal & Sun Alliance to jump after raising its price guidance in the wake of positive full-year results last week. Shares were up almost 5%, or 6.25p, to 136p, and ensured a positive session for the rest of the sector.

Prudential, which posts figures later this week, gained 5.5p to 601p, while Legal & General was up 3.75p to 131.75p.

In the FTSE 250 Index, Fox’s biscuits maker Northern Foods took a hammering - down 17% or 22.25p to 107.75p – on the back of its warning that sales of pastry and biscuit products had been hit by factors such as price cutting and the shift towards healthier eating.

Tour operator MyTravel was in better form on the day of its annual meeting, rising 5% or 10p to 230p as a trading update showed it had continued its recovery despite rising fuel bills.

The biggest Footsie risers were Royal & Sun Alliance up 6.25p at 136p, Vodafone ahead 5p at 129.75p, Enterprise Inns up 33.5p at 926p and Kingfisher ahead 8p at 239p.

The biggest fallers were Antofagasta down 38p at 1982p, Smith & Nephew off 5.5p at 513.5p, Cadbury Schweppes down 6p at 582.5p and SABmiller off 11p at 1110p.