Drinks firms contribute to upbeat return of FTSE

Traders were still in the festive spirit today as drinks firms helped boost stocks during an upbeat return following the Christmas break.

Traders were still in the festive spirit today as drinks firms helped boost stocks during an upbeat return following the Christmas break.

Takeover rumours involving InterContinental Hotels also managed to excite the few dealers at their desks after the holiday, while sentiment from Wall Street offered a boost after gains for the Dow Jones Industrial Average.

With oil prices lower and the Dow opening in positive territory today, the FTSE 100 Index stood 55.2 points higher at 6245.2 at the close.

Drinks companies were buoyed by hopes of a strong festive season. That was shown in a rise of 21.5p to 1005.5p for Guinness owner Diageo, while SABMiller lifted 19p to 1185p.

There was a gain of almost 3% for InterContinental Hotels following a rise for the stock on Friday. Speculation pointed to private equity interest or a possible move by Sheraton owner Starwood.

The shares were up 35p at 1252p, but traders said a bidder may need to offer as much as 1500p a share to get its hands on the hotelier.

Supermarkets were among other top performers following a rise of 7p to 409.75p for Tesco, while Morrisons was ahead 5.25p at 257.5p and Sainsbury cheered 6.25p to 413.25p.

Hopes for another strong year in the housing market meant Persimmon rose 23p to 1511p, with second-tier rival George Wimpey flat at 558p.

The leading shares were offered a boost from mining stocks which were revelling in higher metal prices across the board. Vedanta was the strongest gainer up 55p at 1210p, while Rio Tinto was close behind – improving 60p to 2709p – and Lonmin 59p stronger at 3012p.

A dip in the price of crude failed to hinder BP and Royal Dutch Shell, which were up 3p at 574.5p and 15p at 1812p respectively.

Outside the top flight, shares in mobile ringtone firm Monstermob slipped 2% after Spanish firm LaNetro Zed bought a majority stake in a weekend deal worth £34 million. Shares were 1p lower at 51.25p, despite Monstermob chairman Hans Snook claiming the deal secured the company’s financial position.

Skyepharma lifted after the drug formulation company agreed a £35 million financing agreement and announced the possible sale of its injectables unit. The moves should help secure the launch of a key product and shares rose quarter of a penny to 27p.

Excitement over a possible Icelandic bid for Moss Bros caused shares in the menswear retailer to jump by 16% today. The sharp rise came as investors seized on a weekend report indicating that Baugur will unveil an £80 million offer for the firm in the next month.

Bauger’s reported interest in Moss Bros comes after a disappointing year for the menswear business, which also trades as Cecil Gee and Hugo Boss. But the stock received a welcome boost finishing up 10.5p at 76.5p.

The day’s biggest blue chip gainers were Vedanta up 55p at 1210p, Standard Life up 10p at 300.25p, Intercontinental up 35p at 1252p and Hanson up 19p at 778.5p.

The day’s biggest blue chip fallers were Yell down 4p at 577p, Drax down 5.5p at 808.5p, Corus down 2.5p at 528.5p and Legal & General down 0.75p at 157.5p.

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