FTSE on the up

The FTSE 100 Index rose of 33.4 points to 6290.2 at mid-morning, although it had been 85 points higher at the start of trading.

Shares in fashion retailer Next made strong gains today as analysts upgraded their forecasts in light of annual results and a positive trading update.

The rise of 4% came as the wider London market cheered a strong session on Wall Street, as the Dow Jones Industrial Average rose by 1.3% in the wake of the Federal Reserve’s decision to keep interest rates on hold.

Gains were seen across the board, with Next the strongest riser after reporting a 4% lift in recent retail sales and outlining plans to turn around the business, which has struggled in the face of strong competition.

The stock was up by 98p at 2194p.

Standard Life’s annual results were also backed by the market, with shares up by 1% – 4p at 311p – following a better-than-expected profits performance and amid plans for cost savings worth £100m (€147m) a year by 2009.

Elsewhere, investors continued to be excited by the prospect of consolidation in the banking sector. Barclays rose another 17.5p to 730p ahead of its possible tie-up with ABN Amro, while Royal Bank of Scotland rose 38p to 2067p as it appeared the next likely participant in any future deal-making.

In the second-tier, Rank Group continued to slide as investors digested the implications of tax increases in the Budget yesterday. The stock fell 13.5p to 211.5p, a drop of 6% after Rank reacted with “dismay” at the news, estimating the casino gaming duty changes would cost it about £8 million a year.

Waterstone’s owner HMV fell 2% as sentiment towards the sector weakened after the publication of disappointing figures from Borders. The stock was down 2.5p at 114.5p.