Financial stocks boost FTSE

Financial stocks led the London market to its fifth session of improvement today, following a lift in confidence across global markets.

Renewed speculation that the US Federal Reserve will take further action to ease credit markets boosted sentiment, while a return of merger and acquisition talk also helped markets.

The FTSE 100 Index rose by 69 points to 6265, building on last night’s improvement of 109 points, as investors and equity markets showed signs of coming to terms with tighter credit conditions.

One of the stocks most affected by the recent uncertainty, Northern Rock, topped the risers board after an improvement of 43p to 771p, or 6%. The mortgage lender has been seen as vulnerable to the tightening credit conditions but investors returned to the stock as fears about its ability to raise funds eased.

Other financial stocks also made headway, with fund managers Man Group up 13.5p at 495p and Schroders ahead 36p at 1316p.

Miners were on the front foot after BHP Billiton’s annual results boosted sentiment yesterday. Kazakhmys led the pack with a gain of 35p to 1285p while Lonmin rose 83p to 3260p.

InterContinental Hotels cheered 29p to 1080p on the back of renewed takeover speculation, with US-based Starwood Hotels & Resorts understood to have an interest in the company.

Services firm Rentokil Initial was among the handful of Footsie fallers following its half-year results. The tone of the statement was positive, with the company confident that the dip in first half profits marked a turning point after its recent troubles. Shares were still off 1.9p at 171.1p.

Housebuilder Persimmon lost 16p to 1237p after a broker downgrade from ABN Amro cited risks from unexpected changes in interest rates and the general economic environment as well as additional cost pressure on materials and labour. Barratt Development fell 3.5p at 946.5p