London’s leading shares hit positive territory for the fifth session in a row today despite losing hold of strong gains earlier in the session.
The FTSE 100 Index closed up 0.9 points at 6196.9, after a downbeat opening on Wall Street knocked investor sentiment during afternoon trading.
The prospect of an interest rate cut in the US to calm volatile markets had helped cheer investors, although confidence remained fragile amid the current levels of uncertainty in the market.
Financial stocks benefited from a strong performance, particularly Northern Rock which has been one of the stocks most affected by the recent turbulence.
The mortgage lender has been seen as vulnerable to the tightening credit conditions, but investors returned to the stock as fears over its ability to raise funds eased. Shares closed up 4%, or 29p at 757p.
Shares in HBOS – another bank caught up in the credit market worries – were also on the rise, up 18p at 898p. The group had hit the headlines earlier this week after revealing it had stepped in to bail out one of its subsidiaries that was struggling to raise finance in the credit markets.
Other financial stocks also made headway, with fund managers Man Group up 8.5p at 490p and Schroders ahead 54p at 1334p.
InterContinental Hotels cheered 17p to 1068p on the back of renewed takeover speculation, with US-based Starwood Hotels & Resorts understood to have an interest in the company.
Meanwhile positive online readership figures boosted newspaper group Daily Mail & General Trust 10p to 693p.
Services firm Rentokil Initial, which was promoted to the top tier today after a year in the FTSE 250, was among the handful of fallers following its half-year results. The group posted a 27% fall in interim profits and even a positive second half and 2008 outlook from management failed to lift the stock, off 1.7p at 171.3p.
Housebuilder Persimmon lost 30p to 1223p 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 Developments also suffered, falling 12p to 938p.
Property firms were also on the back foot, with real estate group Hammerson, down 32p at 1275p, and British Land, off 28p at 1258p, two of the hardest hit.
Elsewhere, online money transfer firm Neteller saw shares pick up 1.5p to 84p despite posting half-year losses largely on the back of last year’s US internet gaming ban.
Photo booth specialist Photo-Me International climbed 2.25p to 60.25p after activist shareholders Cycladic and Principle Capital called for the removal of the firm’s chairman and chief executive following an “unsatisfactory” operational performance.
The biggest Footsie risers were Schroders up 54p at 1334p, Northern Rock ahead 29p at 757p, SABMiller up 35p at 1294p and Tesco ahead 11p at 416p.
The biggest Footsie fallers were Hammerson down 32p at 1275p, Segro off 13p at 529p, Persimmon down 30p at 1223p and British Land off 28p at 1258p.