FTSE closes in on 6,100 barrier

Investors in blue-chip stocks were today treated to the sight of the FTSE 100 Index breaking through the 6100 threshold for the first time in more than five years.

The trigger for the latest rise by UK equities came from Wall Street where shares rallied yesterday on hopes US interest rates may be near their peak.

The Footsie soared as high as 6100.6 – an advance of more than 50 points - before paring some of these gains during the afternoon to close at 6089.8, up 45.7 points or 0.76%.

Inflation data in the UK could provide the market with fresh impetus tomorrow if it shows that prices of consumer goods are slowing down, boosting the case for interest rates to be cut.

Insurers were among the sectors in positive territory today, as investors pondered the prospects for consolidation following the news that Standard Life had received approaches, including a reported merger move by Resolution Life.

Prudential gained 14.5p to 668.5p, a gain of 2%, while Norwich Union owner Aviva rose 8p to 806p and Friends Provident added 3%, or 5p to 198p. In the 250 Index, Resolution ticked 14p higher to 630p.

Nuclear power generator British Energy also stormed up the blue chip riser’s board after it revealed a further jump in the amount of money paid for its output.

Shares lifted 2% or 16.5p to 730p as the company also said generation in the year to March 31 bettered the previous year. The trading update continued the progress seen since a financial restructuring rescued the debt-laden business from the brink of collapse in 2003.

However its performance was matched by brickmaker and possible takeover candidate Hanson, up 4% or 31p to 760.5p.

Accountancy software firm Sage remained steady at 261p amid relief it will not be drawn into a £400 million bidding war for a rival Norwegian business. The Newcastle-based group said it will not raise its price for Visma, even though private equity firm HgCapital beat its offer yesterday.

The news from the market was not all sweet, as British Sugar and Silver Spoon owner Associated British Foods slumped 6% or 54.5p to 788.5p on the impact of soaring energy costs and falling sugar prices across Europe.

The food and retail group posted a 2% fall in pre-tax profits for the 24 weeks to March 4 and warned earnings would continue to be hit in the second half and through next year. Fellow sugar producer Tate & Lyle followed suit, down 0.5p to 555p.

Among other developments, chip designer Arm Holdings put on 2p at 134.75p after revealing it had made an “encouraging” start to the financial year.

The day’s biggest blue-chip risers were WPP Group up 29.5p to 701.5p, International Power ahead 12.5p at 304.25p, Hanson up 31p to 760.5p and Imperial Tobacco up 69p to 1754p.

The heaviest fallers were Associated British Foods off 54.5p to 788.5p, Smith & Nephew down 9p to 511p, Liberty International off 17p at 1174p and Reed Elsevier down 7.5p to 535p.