Footsie in the black

Outsourcing group Capita added more than £250 million to its market value today after strong half-year results lifted its share price by 9%.

The congestion charging specialist took centre stage on a day when the wider market was feeling happier with life after comments from Federal Reserve chairman Ben Bernanke yesterday fuelled hopes 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 another 41 points early today before fading to settle just below its opening mark – down 7.1 points at 5770.9.

Just as hopes grew of a slowing in rate rises in the US, retail sales numbers in the UK fuelled fears on this side of the Atlantic that the Bank of England may need to increase interest rates before the end of the year.

Capita’s strong performance – up 44p to 518.75p – came after it comfortably exceeded market expectations with a 24% rise in half-year profits to £92.4 million.

It was followed on the leaders board by Tate & Lyle as the sugar and starch group continued to benefit from yesterday’s positive trading update. Shares were up another 21p to 668.5p.

Meanwhile, British Airways stock rose 11p to 368.25p as rumours of a bid from Emirates resurfaced in the market.

BSkyB, which has been hit by negative sentiment following the launch of its broadband offer, recovered some of the losses with a rise of 13.5p to 544.5p.

On the downside, gambling stocks continued the volatility seen after US prosecutors charged BetonSports and its chief executive with racketeering.

PartyGaming, which made strong gains yesterday, fell back to close 7% or 7p lower at 87.25p. Second-tier rival 888 Holdings was off 16.75p at 161p, a drop of 9%.

Among other stocks in the FTSE 250 Index, the woes of MFI continued as its shares dropped 20% or 21.25p to 85p, 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.

And Colt Telecom fell 38.5p to 126.5p as analysts downgraded forecasts in the wake of a disappointing trading update.

Elsewhere, retailer Mothercare rose almost 3% or 8.75p to 341.75p, helped by a 2.5% improvement in first quarter like-for-like sales in the UK.

But Kesa Electricals dipped 2.75p to 293p after it said the “World Cup effect” lifted total sales at its Comet chain by more than 10%.

Stanley Leisure fell 29.5p to 590p – 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.

The biggest Footsie risers were Capita Group up 44p at 518.75p, Tate & Lyle ahead 21.5p at 668.5p, British Airways up 11p at 368.25p and Yell Group ahead 13.5p at 526p.

The biggest fallers were PartyGaming down 7p at 87.25p, Friends Provident off 3.5p at 175.5p, RioTinto down 54p at 2726p and Carnival off 38p at 2099p.