FTSE sees off May with gains

London’s leading shares ended their worst month for more than three years with solid gains today.

London’s leading shares ended their worst month for more than three years with solid gains today.

After an unsteady start, which took prices further into negative territory, a positive move on Wall Street helped the FTSE 100 Index above its break-even mark.

The blue-chip index ended the session 71.8 points higher at 5723.8.

But the gains did little to erase painful recent losses, serving only to take the Footsie to within almost exactly 300 points of its level a month ago.

Today’s gains came as an improvement in the value of the US dollar offset recent concerns over higher interest rates in the US.

Sentiment in London was further boosted by evidence of a softening UK housing market, which lessened expectations of a rate hike by the Bank of England.

The second-tier FTSE 250 index was also in buoyant mood with a gain of 62.7 points, taking it to 9298.3.

Victims of recent falls were back on the risers board today with miner Xstrata leading the way, up 5% or 110p at 2130p, while Kazakhmys rose 50.5p to 1136p.

Utility companies also provided a refuge for investors, with International Power rising 14.75p to close at 289.75p amid hopes of consolidation in the sector.

That followed news that an offer worth $8bn (€6.2bn) by Mirant for US power firm NRG had been rejected.

British Energy shares were ahead 25p at 692p while Scottish & Southern Energy rose 42p to 1130p after annual results met market expectations.

Financial companies added some backbone to the market after Friends Provident benefited from an upgrade by analysts at Credit Suisse. Friends shares jumped 2% or 4.25p to 177.5p, while Barclays gained almost 5% or 28.5p at 618p.

The telecoms sector was also in positive territory with shares in mobile phone group Vodafone continuing to benefit from a positive reception to yesterday’s results and strategy update.

The stock featured on the risers board after a gain of 3.25p to 123p while Cable & Wireless put on 4% or 4p to reach 103.25p.

Boots led the fallers board with the retailer 4% or 26.5p lower at 705p as shares no longer carried the right to the latest dividend payment.

In the second tier, Northern Foods eased 0.25p to close at 96.5p as investors weighed up its plans to sell almost half its business in a major restructuring programme.

The Fox’s Biscuits and Goodfella’s Pizza owner also posted a 27% slide in pre-tax profits as it battled healthier eating habits and stiff competition.

Also reporting today was Anglian Water owner AWG, which was up 6p at 1092p as it increased its dividend payment by 4.3% to 50.8p a share for last year and said it planned further increases 2% above the rate of inflation every year to 2010.

The biggest FTSE 100 risers were Xstrata up 110p at 2130p, International Power gaining 14.75p to close at 289.75p, Barclays 28.5p higher at 618p and Kazakhmys which rose 50.5p to 1136p.

The biggest fallers were Boots 26.5p cheaper at 705p, Compass Group off 2.5p at 236.5p, Brambles 3.25p lower at 434.25p and Reed Elsevier down 3p at 520p.

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