Wall Street lends FTSE helping hand

Banking and housebuilding stocks were higher today after a record close for Wall Street boosted confidence across world markets.

The rally in the United States came as yesterday’s profit warnings from investment banks UBS and Citigroup appeared to remove some of the uncertainty hanging over world markets since the start of the credit crisis.

With Asian traders buoyed by the sight of the Dow Jones Industrial Average at a level above 14,000, the Footsie followed suit with a gain of 26.4 points at 6532.6 at mid-morning. It had been 60 points higher earlier in the session.

Housebuilders benefited from the improved sentiment as Taylor Wimpey lifted 16.25p to 292p, Persimmon rose 47.5p to 1040p and Barratt Developments gained 33.5p to 783p.

Barclays set the pace among banking stocks, with its shares climbing 27.5p to 628p. Halifax Bank of Scotland rose 38p to 949p, but there was only a modest recovery for Northern Rock after its tested new record lows earlier in the day.

The stock, which has been rocked by fears of a cut-price takeover, was 1.9p higher at 134p, a gain of 1.4%.

Supermarket chain Tesco rose almost 4% – or 15.5p to 451p – after better than expected half-year profits of £1.32 billion. Like-for-like sales slowed to 3.5%, but Tesco said trends improved during August.

A number of fashion retailers were also doing well as analysts reported signs of an upturn in the clothing market. Next lifted 67p to 2050p, while Marks & Spencer was 9p higher at 634.5p, a gain of just over 1%.

Satellite broadcaster BSkyB held firm, up 3p at 687p, despite the Competition Commission’s preliminary findings that its 17.9% stake in ITV was against the public interest.

In the second tier, car dealership Pendragon rose by almost 9%, or 5p to 62.5p.