FTSE storms ahead

The London market stormed ahead to finish the week at its highest level for nearly six-and-a-half years, closing 46 points up at 6462.4 on Friday.

The FTSE 100 Index drifted in the early part of the shortened trading week after the Easter break as investors trod water amid a lack of significant corporate news.

But surging oil prices led to moves both in London and on Wall Street, with the Dow Jones Industrial Average in the US also enjoying strong advances at the end of the week.

Rising crude oil prices put the oil sector firmly in the spotlight in what was an eventful week for majors BP and Royal Dutch Shell.

Both groups saw shares soar as oil prices leapt to more than 64 US dollars a barrel. BP was ahead 4% at 575.5p at the end of the week, while Shell enjoyed a 3% surge to 1738p.

But both had been in the headlines for different reasons earlier in the week. BP incurred the wrath of investors over the planned “golden goodbye” package for outgoing chief executive Lord Browne, while Shell finally drew a line under what was the biggest crisis in its history. It said it would pay £180 million to shareholders as a compensation settlement for its shock move three years ago to downgrade its proven oil and gas reserves.

Supermarkets were big movers on the London market again this week as the Sainsbury’s bid saga took centre stage with news that a potential £10.1 billion private equity bid had collapsed.

The group saw its shares shed 4% since Monday after the CVC Capital Partners-led bidding consortium threw in the towel, failing to win backing from the major shareholders, the Sainsbury family. The group managed to stem potentially worse losses with talk of a possible review of its £7.5 billion freehold property portfolio, which some estimate could even be worth as much as £10 billion. But this was not enough to halt its decline to 536p at close on Friday.

Meanwhile, as Sainsbury’s suffered, shares in fellow retailer Marks & Spencer soared by 4% during the week as takeover focus turned instead to the group. M&S closed at a respectable 721p.

Elsewhere in the retail sector, fears of a slowdown were growing as a number of stores reported slumping sales.

Seymour Pierce retail analyst Richard Ratner mooted that a fall off in “big ticket” items had begun after Carpetright, furniture group ScS Upholstery and John Lewis said sales were softer than expected.

Carpetright saw its shares dive 3% to 1116p this week following warnings over sales, blaming January’s quarter point interest rate hike to 5.25% and a drop in disposable income.

ScS laid the blame on the unseasonal warm weather keeping shoppers away from the high street as it said Easter sales had been “very disappointing”. Shares plunged 10% on Friday alone to 356.5p.

In the FTSE 250, Countrywide was one of the week’s biggest risers as its takeover story looked set to draw to a conclusion, sending shares up 3% to 620p.

Shareholders backed a revised £1.05 billion sale to US private equity group Apollo, although with more than two weeks to go until the deal can be passed in the High Court, a rival offer could still materialise.

Fellow private equity group 3i is rumoured to have been the un-named third party that approached Countrywide earlier in the week, forcing Apollo to up its bid by £400 million. 3i is not commenting, but investors will be watching the situation with interest.