FTSE on the up

The FTSE 100 Index reached its highest point for nearly two months today as better-than-expected US growth figures cheered traders.

The FTSE 100 Index reached its highest point for nearly two months today as better-than-expected US growth figures cheered traders.

The London market added 73.1 points to 5601.2 after the surprise news on the US economy’s second-quarter performance prompted a strong start on Wall Street.

US-facing businesses such as heating and plumbing giant Wolseley were among the Footsie’s leading performers as the top flight reached highs not seen since the beginning of July.

The company has been battered in recent months by the plummeting US housing market but gained 6%, or 24.5p, to 442p today.

Healthy gains for financial stocks also underpinned the wider market’s progress, although worries over the impact of tropical storm Gustav on the Gulf of Mexico region saw big-hitters BP and Royal Dutch Shell on the back foot.

In banking, results from French giant Credit Agricole boosted UK rivals by raising hopes the worst of the credit crunch may be over. Royal Bank of Scotland and Barclays cheered 8.25p to 240p and 19.25p to 349.5p respectively.

Insurers were also enjoying a stronger showing, with RSA Insurance up 8.3p to 154.1p on renewed talk of bid interest from Zurich Financial Services.

The leading blue-chip riser, however, was supermarket giant Sainsbury’s which gained almost 8%, or 25.25p to 344p late in the session as vague takeover rumours did the rounds.

Moving the opposite way amid the weather-related fears from the Gulf were Shell, down 2p to 1878p, BP 3.5p lighter at 522.25p and BG Group, which was 7p lower at 1187p.

Oil prices were volatile throughout the session, above US$120 a barrel thanks to the nerves, before edging back to below US$118.

Another busy session for corporate results focused attention on the FTSE 250 Index, with Premier Foods down 5.25p to 92p after a 29% fall in half-year profits. The Hovis maker said it remained on track to meet full-year forecasts, but analysts were concerned about its debt position and rising costs.

Property consultancy Savills offered a gloomy assessment on the house market, but received a positive reaction in the City after its half-year figures came in ahead of expectations.

Shares shot to the top of the second tier’s risers board, up 41.25p to 283.75p, or 17%, as investors welcomed the decision to maintain the half-year dividend.

But a positive trading update from Stagecoach failed to drive shares higher, with the stock falling 0.75p to 302p amid profit-taking after a strong recent run.

The South West Trains operator revealed that profits since May had been better than expected, helped by stronger bus demand.

Elsewhere Taylor Wimpey was up 5p to 53.25p as shares bounced back following heavy falls seen alongside yesterday’s gloomy interims. The recovery came despite Nationwide’s figures showing double-digit annual falls in house prices.

The leading Footsie risers were Sainsbury’s up 25.25p to 344p, Wolseley ahead 24.5p at 442p, Barclays up 19.25p at 349.5p and RSA Insurance ahead 8.3p to 154.1p.

The four worst performers were Kazakhmys down 34p to 1305p, Severn Trent off 30p at 1375p, Eurasian Natural Resources down 22p to 1021p and Cairn Energy off 54p at 2857p.

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