FTSE makes modest gains

Share prices in London made modest gains today as investors ventured back into the market following the recent turmoil.

Takeover talk and cost-saving news helped take the top flight FTSE 100 Index back on to positive ground, starting the week with a 28.7-point rise to reach 5626.1.

But nervousness remained and across the Atlantic Wall Street’s benchmark Dow Jones Industrial Average was around 15 points off its opening mark as trading in London closed, while the Nasdaq also hoveed just inside negative territory.

Among the biggest gainers in London was insurer Royal & Sun Alliance, which rose 3% or 3.5p to close at 126.5p after it announced that it would deliver savings of £70m (€102m) in the next two years in the UK and £130m (€190m) million across the group.

The insurer said it would axe 1,550 staff – including 1,000 in the UK – as part of its cost-cutting drive.

ITV was also in buoyant mood after it was named in reports as a possible takeover target.

Shares in the broadcaster ticked 2.5p higher to 105.25p as investors welcomed speculation linking it with a possible bid from US-based private equity giant KKR, which is fronted by Lord Hollick.

Other media sector shares featuring on the top flight risers board included BSkyB, which gained 13p at 564p.

But the biggest increases were for cruise giant Carnival after better sales news helped it stage a recovery from recent batterings.

The group’s shares have fallen in recent weeks after it lowered its earnings forecast for 2006, blaming rising fuel prices and weaker demand for Caribbean cruises – wiping 12% off the value of the company in one day.

But shares recovered almost 4% today to stand 77p up and reaching the top of the Footsie risers list at 2194p after it announced a new 1 billion US dollar share buyback plan and said it was seeing a rebound in Caribbean bookings after slashing prices.

Associated British Ports lifted 1% or 12p to 881p as investors licked their lips at the prospect of an intensifying battle for control of the UK’s biggest ports operator amid reports of a new offer worth almost £2.7 billion.

Britannia Ports – a consortium led by Australian bank Macquarie – is said to be preparing to up the stakes by trumping the agreed offer made last week by Goldman Sachs of 840p a share, or £2.58bn (€3.7bn).

But Lloyds TSB did little to inspire investors, slipping 3.5p to close at 523.5p after saying in a trading statement that it was on track to deliver a strong first-half performance.

Elsewhere, the UK’s largest wine warehouse Majestic Wine toasted a 2% rise in its share price – up 5p to 291p – after reporting a 10% lift in pre-tax profits to £14.5 million for the year to March 27. Majestic said UK consumers were showing greater discernment, with fine wine sales boosted by 30%.

The biggest FTSE 100 risers were Carnival up 4% or 77p at 2194p, Prudential gaining 17.5p to close at 566p, Royal & Sun Alliance putting on 3.5p to reach 126.5p and Hanson rising 17.5p at 639p.

The biggest fallers were Cable & Wireless 1.25p lower at 108.25p, Rio Tinto off 29p at 2688p, Shire down 7.5p at 744p and Lloyds TSB 3.5p lower at 523.5p.