London begins new year upbeat

Trading on the London Stock Exchange started the year in an upbeat mood as the FTSE 100 index closed at its highest level in almost six years today.

Trading on the London Stock Exchange started the year in an upbeat mood as the FTSE 100 index closed at its highest level in almost six years today.

The market was 90.1 points stronger at 6310.9 by the finish, which was its best closing mark since early 2001, beating last month’s 6260.

There was little corporate news to disrupt momentum, while Wall Street was closed to mark the death of former President Gerald Ford.

However, traders seemed to be moving into position for the new year with a number of key sectors benefiting, including financial stocks and some of the miners.

The biggest movers in London came from the mining sector, with Lonmin up 87p at 3097p, BHP Billiton 27.5p stronger at 962p and Anglo American 62p higher at 2553p.

A crop of shares were boosted from new-year window dressing as analysts outlined their hopes for stocks and sectors in 2007.

Banks were among those in favour after Dresdner Kleinwort lifted its price target for Royal Bank of Scotland. RBS added 43p to 2036p, while HBOS added 22p to 1154p and HSBC cheered 8p to 939p.

Two of the sector’s possible takeover targets, Barclays and Alliance & Leicester, were up 16p and 14p to 746p and 1152p respectively.

Chemicals group ICI also continued to rise after shares were buoyed by takeover speculation over the festive period. The stock, which is seen as a target of paints firm Akzo Nobel, lifted 9.25p to 461.25p.

Meanwhile, shares in Vodafone rallied 2% amid signs that the mobile-phone company was less likely to land Hutchison Essar. The stock was up 2.25p to 143.75p, but had been under pressure recently amid fears that it could overpay for India’s fourth-largest operator.

There was also encouragement for the retail sector after reports of a better-than-expected end to December.

Next was the main beneficiary as investors bought into the fashion retailer ahead of a trading statement on Thursday. Shares were up 2%, or 42p to 1842p.

Other retailers followed suit with Argos owner Home Retail Group up 7.5p to 417.5p, while Currys firm DSG International rose 4p to 195.5p.

In the FTSE 250 Index, Comet owner Kesa Electricals was up 3%, or 9.25p, to 348.5p, but the gains were not seen across the sector after declines for HMV and JJB Sports.

HMV has already warned of disappointing profits and the Waterstone’s owner was down 1p at 142.25p. Sportswear retailer JJB dipped 7.25p to 228p, a fall of more than 3%.

Services business Rentokil Initial found itself in positive territory, up 1.75p at 167.5p, after sealing a £9m (€13.4m) deal for an environmentally-friendly bathroom business. Its acquisition of Enviro-Fresh includes a key product that saves on water flushed down a urinal.

The day’s biggest blue-chip risers were Standard Life up 10.25p to 306p, Kelda up 29p to 955p, Royal & Sun Alliance up 4.75p to 157.25p and Johnson Matthey up 43p to 1452p.

The day’s biggest blue-chip fallers were Drax down 11.5p to 804.5p, Experian down 1.5p to 598p, Liberty down 3p to 1393p and Enterprise Inns down 2p at 1351p.

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