FTSE finally back to positive territory

The widely anticipated bounce in London share prices finally materialised today putting back some of the billions wiped out in recent plunges.

With hopes that the savage correction in share prices had run its course, the FTSE 100 index rebounded sharply to close 146 points higher at 5678.7.

While offering welcome relief for beleaguered investors who have seen more than 550 points hacked off the blue chip index since May 11, the gains still left the top flight far short of the 6132 level seen last month.

Mining and commodity stocks which suffered the brunt of the week-long bloodbath led the way, recovering on the back of higher oil and metal prices.

But a dizzying 35% leap in profits for Marks & Spencer proved too much for investors who piled in to take profits after a strong run for the recovering company, sending its value 3% lower.

Yellow Pages owner Yell was among the best blue chip performers today after full-year results showing a 26.1% rise in full-year profits impressed analysts. With US growth prospects also strong, shares were up 9% or 41.5p to 505p.

But commodity-based stocks led the way with Cairn Energy lifting more than 10% gaining 204p at 2187p after the cost of crude rose above 70 US dollars a barrel.

Stronger metal prices helped Kazakhmys which topped the risers climbing 13% or 124.5p to reach 1082.5p, Xstrata which recovered 178p at 1942p and Antofagasta which ended the day 183p higher at 2072p.

But there was no such gain for M&S as investors viewed strong annual results from the group as the cue to take profits after an increase of 90% in its share price since June.

Shares were down 18p at 549p even though full-year results were in line with expectations and chief executive Stuart Rose pledged to drive further growth at the high street business.

The boomerang effect was also felt in the FTSE 250 Index, which yesterday saw its biggest ever points fall of 363 points. Today the index rebounded 405.7 points to close at 9234.3.

One of the biggest gains came from Associated British Ports after it emerged a consortium led by Goldman Sachs had raised its proposed offer to 810p a share - up on the 730p a share offered previously and valuing the business at £2.44 billion.

With AB Ports allowing the party to carry out limited due diligence, shares in the company were up 15%, or 100p at 770p.

But the London Stock Exchange fell 1% or 16p to 1174p as investors grew concerned that a tie-up between Euronext and the New York Stock Exchange or Deutsche Boerse could remove interest in LSE.

A deal may give Nasdaq a free run at LSE and therefore mean it will not have to pay a premium for its shares.

The biggest FTSE 100 risers were Kazakhmys which climbed 13% or 124.5p to close at 1082.5p, Cairn Energy gaining 204p at 2187p, Xstrata which gained 178p at 1942p and Antofagasta 183p higher at 2072p.

The main blue chip fallers were Marks & Spencer which lost 18p to close at 549p, Imperial Tobacco which also slipped 18p to 1620p, Vodafone which edged 1.25p lower to 116.75p and BT which fell 1.75p reaching 222.75p.