FTSE posts strong gains

The FTSE 100 Index overcame the shock of a crackdown on banks overcharging customers for late repayments on their credit cards to post strong gains today.

After falling into the red when the Office of Fair Trading (OFT) warned banks that it would view any penalty charge above £12 (€17) for missed payments as unfair, the Footsie recovered to close 39.4 points higher at 6044.1.

Companies dealing in commodities were the chief drivers of the recovery, with Antofagasta leading miners higher and a first-quarter trading update from oil giant BP drawing a positive response in the City.

BP told investors that its daily output totalled 4.025 million barrels between January and March and while this was just shy of forecasts, investors were buoyed by an improvement in its refining business.

BP ticked 10.5p higher to 675p and chief rival Royal Dutch Shell also got going after a slow start, rising 26p to 1912p.

All the mining firms in the Footsie have risen by more than 10% over the past seven days to ensure the index digs in above the 6000 level. Antofagasta rose 104p to 2311p to be the strongest riser on a day when Rio Tinto rose 91p to 3135p.

But the high street banks were under pressure following the warning on charges from the OFT amid fears that their revenues would suffer.

Northern Rock declined 2% or 19p to 1146p, while Royal Bank of Scotland fell 14p to 1854p and Lloyds TSB drifted 1.5p to 544p.

Alliance & Leicester was hardest hit – off 4% or 53p to 1195p – as investors got cold feet at the prospect of a bid approach and took fright at the OFT stance on credit cards. The stock also went ex-dividend today, meaning investors are no longer entitled to the most recent payout.

In the retail sector, DSG International was ahead by 1.75p at 186.25p after investors approved of a new strategy that will see the Dixons name disappear from the UK high street.

DSG will use the “Currys.digital” banner for its 190 Dixons stores as it merges its two core operations to create a new 550-shop division.

But the airline industry was experiencing a spot of turbulence after Icelandic investor FL Group sold its 16.9% stake in second-tier carrier easyJet.

Shares in easyJet fell 9% or 31p to 327p – their lowest level since November - as a bid for the second-largest low-cost carrier disappeared off the radar.

Ringtones specialist MonsterMob was another loser among mid-cap stocks after warning that UK profits would be substantially lower this year than in 2005.

The slowdown caught analysts by surprise and left its shares 8% or 28.75p lower at 324.75p – even though the UK only accounts for a small proportion of its business.

The biggest Footsie risers were Scottish & Newcastle up 27p at 544p, Antofagasta up 104p at 2311p, Kazakhmys up 50p at 1231p and Smith & Nephew up 20p at 536p.

The biggest fallers were Alliance & Leicester down 53p at 1195p, Reuters down 12.25p at 381p, Friends Provident down 6.25p at 204.5p and Kingfisher down 6.5p to 233p.