FTSE investors in optimistic mood

Outsourcing group Capita surged to the top of the blue-chip risers board today after delighting UK investors with better-than-expected profits.

Capita’s 8% rise came on a day of optimism for the wider market after comments from the Federal Reserve chairman Ben Bernanke last night fuelled hopes worldwide that recent interest rate rises in the US may be near their end.

The FTSE 100 Index rose 96.3 points on the back of Mr Bernanke’s testimony yesterday and advanced by another 13.2 points today at 5791.2. The top flight index was 41 points higher earlier in the session, helped by a gain of more than 200 points for the Dow Jones Industrial Average last night.

Among individual stocks, Capita was the star performer as the company which runs the London congestion charge added 7% to market expectations with a 24% rise in half-year profits to £92.4 million. The stock was up 39.5p to 514.25p.

Miners enjoyed an immediate boost from the signs that recent hikes in US interest rates could be nearly over, although Xstrata was the only blue-chip stock to hold the gains as shares reached lunchtime 50p higher at 2055p.

Meanwhile, British Airways stock rose 8p to 368p as rumours of a bid from Emirates resurfaced in the market.

Tate & Lyle also continued to benefit from yesterday’s positive trading update as shares rose another 15p to 662p. BSkyB which has been hit by negative sentiment following the launch of its broadband offer, recovered some of the losses with a rise of 11.5p to 542.5p.

Outside the top flight, retailer Mothercare rose 1% or 5p to 338p, helped by a 2.5% improvement in first quarter like-for-like sales in the UK.

Kesa Electricals dipped 1.5p to 294.25p after it said the “World Cup effect” lifted total sales at its Comet chain by more than 10%.

Elsewhere, the woes of MFI continued as its shares dropped 16% or 17p to 89.25p, following half-year losses of £45 million and a warning that there remained much to be done in its recovery.

There was also disappointment at the lack of an update on the sale of the group’s troubled retail arm.

Meanwhile, Stanley Leisure fell 28p to 591p – despite reporting an increase in attendance at its provincial casinos – after it said gamblers at its London venues had enjoyed a winning run in recent weeks.