The FTSE 100 Index rose almost 2% today as investors returned to the market after the sell-off of the previous week.
Advances for heavyweight oil and gas firms helped blue-chips forward, although retail giant Marks & Spencer suffered further falls as analysts marked down the stock following last week’s shock profits warning.
US markets opened higher after Friday’s Independence Day break, giving the Footsie added momentum to close 99.9 points higher at 5512.7.
The 1.8% gain took the blue-chip index above the 5500 barrier and well away from the “bear market” lows below 5400 briefly touched last week.
Oil prices eased back slightly today, reducing the fuel pressure on a host of the Footsie’s transport players. FirstGroup was the leading riser, up 36p to 536.5p, with Thomson Holidays owner TUI Travel adding 8.1p to 186.2p.
British Airways was almost 5% higher, up 9p to 206p, after no-frills rival easyJet reported strong passenger figures and said it flew with a load factor of 86.9% in June, in line with last year. EasyJet’s shares rose 9.75p to 254.25p in the FTSE 250 Index, gain of 4%.
Oil majors also underpinned progress despite crude prices easing back slightly from the record levels seen last week well above the 140 US dollars a barrel. Deutsche Bank analysts lifted target prices for BP and Royal Dutch Shell, helping the duo gain 20.5p to 572p and 76p to 2016p respectively.
But other downbeat broker comment was responsible for many of the fallers who missed out on the wider gains. Marks & Spencer was the target of more downgrades today as analysts feared the consumer squeeze could wipe a third or more off profits. M&S was the biggest faller, off 10p to 217p, or 4%.
Next joined M&S on the fallers board after a downgrade from Panmure Gordon stockbrokers sent it 17p down to 856p.
B&Q owner Kingfisher was also 1.1p off at 98.3p, although mobile phone retailer Carphone Warehouse bucked the trend after Goldman Sachs reinstated its coverage of the broadband and phone retailer with a buy rating. Shares were up 11p to 190p.
Royal Bank of Scotland was a prominent faller after being marked down today by Cazenove on worries over last year’s ABN Amro purchase. The NatWest owner fell 5.25p to 201p.
Other banking stocks under pressure included Bradford & Bingley as concerns over its £400m (€503m) fundraising plans – overhauled for the second time on Friday. B&B was 8p lower at 42p – a 16% fall.
Broadcaster ITV was on the back foot amid continued fears over prospects for the advertising market. Shares in the firm were down 1p to 41.6p.
In the FTSE 250 housebuilder Taylor Wimpey also bore the brunt of City concerns, with RBS analysts warning of a “severe correction” in prices across the sector. The shares fell 14% or 4.5p to 27.25p.
The biggest Footsie risers were FirstGroup up 36p at 536.5p, Ferrexpo ahead 22.5p at 350.5p, Carphone Warehouse up 11p at 190p and Rolls-Royce up 17p at 342.5p.
The biggest Footsie fallers were M&S down 10p at 217p, RBS off 5.25p at 201p, ITV down 1p at 41.6p and Friends Provident down 2.2p at 92.3p.