Financials boost FTSE

A strong performance from financial stocks boosted the London markets today, offsetting heavy losses from steel maker Corus.

The FTSE 100 Index closed 41 points higher at 5929.3 after Prudential came back in focus as bid rumours swept the City.

Jimmy Yates, trader at CMC Markets, said: “Significantly, the FTSE today tested territory that hasn’t been seen since the start of the month and a move back to the August high of 5985 may now be within reach.”

The Pru lifted almost 3% or 15p to 593.5p even though analysts cast doubt over the chances of Norwich Union owner Aviva renewing its interest in a takeover.

It was followed up by Legal & General and Friends Provident as investors bought in to the sector. Legal & General was up 2.25p to 133.5p and Friends Provident gained 3.5p to 187.25p.

But they were beaten to the top of the blue chip leaderboard by Build Center chain Wolseley, which put on 46p to 1135p amid signs that it was recovering from a recent poor run. Shares have been hit by a slowdown in the US but could now be returning to their true level ahead of results next month which are expected to be strong.

Second on the risers board was pubs owner Enterprise Inns after Deutsche Bank lifted its price target from 1060p to 1200p and reiterated its buy rating. Shares in Enterprise were 31p higher at 1025p.

But shares in steel maker Corus slipped into the red after its first-half results disappointed investors.

The Anglo-Dutch giant fell almost 2% or 7.25p to 393.25p after it posted a 37% fall in operating profits and warned of higher raw material and energy costs.

Outside the top flight, H Samuel and Ernest Jones owner Signet gained 1.25p to 107.5p after it posted a 12% hike in pre-tax profits for the first half of the year. Signet has been in the bid spotlight in recent days with Icelandic investment group Baugur and jewellery entrepreneur Gerald Ratner both eyeing up its UK businesses.

Regional newspaper publisher Johnston Press gained 19.5p to 402p despite a “sustained downturn” in advertising revenues which saw pre-tax profits fall 3% in the first half. Investors instead concentrated on its chances for the full year, which remained encouraging.

But LogicaCMG shares fell 4% or 6.25p to 153.5p after it posted a 21% fall in pre-tax profits for the first half of the year as it continued to struggle in the UK. The Anglo-Dutch firm said pre-tax profits for the six months to June 30 fell from £37.2m (€55.2m) to £29.5m (€43.77m).

The day’s biggest blue chip risers were Wolseley up 46p to 1135p, Enterprise Inns up 31p to 1025p, Prudential up 15p to 593.5 and Vedanta Resources up 34p to 1360p.

The day’s biggest blue chip fallers were Corus, off 7.25p to 393.25p, British Airways, down 6.25p at 408p, PartyGaming, off 1.5p at 114p, and Cadbury Schweppes, down 5p at 556.5p.