FTSE refreshed after Christmas holiday

The FTSE 100 Index added almost 1% during a buoyant return from the Christmas holiday today.

Takeover rumours involving InterContinental Hotels excited the few dealers at their desks after the break, while sentiment from Wall Street offered a boost after a 0.5% gain for the Dow Jones Industrial Average last night.

With oil prices lower and the Dow forecast to open in positive territory today, the Footsie rose 46.3 points to 6236.3 by mid-morning.

The gain of 5% for InterContinental Hotels followed a similar rise for the stock on Friday. Speculation pointed to private equity interest or a possible move by Sheraton owner Starwood.

The shares were up 62p at 1279p – another new record – but traders said a bidder may need to offer as much as 1500p a share.

Elsewhere, drinks companies were buoyed by hopes of a strong festive season. That was shown in a rise of 22.5p to 1006.5p for Guinness owner Diageo, while SABMiller lifted 24p to 1190p.

Supermarkets were among other top performers following a rise of 6.75p to 409.5p for Tesco, while Morrisons was ahead 3.75p at 256p. Hopes for another strong year in the housing market meant Persimmon rose 22p to 1510p.

Outside the top flight, shares in mobile ringtone firm Monstermob were up 3% after Spanish firm LaNetro Zed bought a majority stake in a weekend deal worth £34 million. Shares were 1.5p higher at 53.75p as Monstermob chairman Hans Snook said the deal secured the company’s financial position.

There was no such lift for Skyepharma after the drug formulation company agreed a £35 million financing agreement and announced the possible sale of its injectables unit. While the moves helped secure the launch of a key product, shares fell 0.75p to 26p.