FTSE makes strong gains

The London market made strong gains today as miners soared ahead and housebuilders were buoyed by encouraging property price figures.

The FTSE 100 Index rose nearly 2% – up 73.4 points to 4226 – with the Thanksgiving holiday in the US giving stocks some welcome breathing space.

New figures showing an easing in the recent pace of house price falls helped bolster a number of beleaguered stocks in the housebuilding sector.

The monthly update from the Nationwide building society saw Taylor Wimpey shoot up by 73%, with impressive gains notched up throughout the sector.

Banking and insurance stocks were responsible for much of the improvement in the top flight, while sentiment was also boosted by a surge for the energy sector after oil prices remained above 50 US dollars a barrel.

BP rose more than 3%, or 17.5p to 530.25p, and Royal Dutch Shell cheered 76p to 1696p.

Among insurers, Prudential and Aviva rose 9% and 7% – 26p to 322p and 23.75p to 380.5p respectively. Meanwhile Barclays added 6.9p to 166.9p, Royal Bank of Scotland was 2p higher at 55p and Lloyds gained 4p to 164p.

HSBC proved the exception after shares dropped 10.75p to 693.25p.

Traders said the Thanksgiving holiday in the United States meant business was subdued in London during the session.

Aside from the recovery by financial and oil stocks, investors were looking closely at the retail sector following the collapse of Woolworths and MFI and after trading updates from B&Q owner Kingfisher and Currys chain DSG International.

Kingfisher was one of the Footsie’s biggest fallers, off 2% or 2.9p at 116.6p, after it reported a 9% drop in like-for-like sales for its B&Q business in the UK.

Half-year losses of £30m (€35.8m) and a gloomy trading update put further pressure on DSG, which saw its shares tumble another 1.5p to 12.5p in the second tier. FTSE 250 rival Kesa Electricals, which owns the Comet chain, improved 7.5p to 79.25p.

In the housebuilding sector, FTSE 250 firm Taylor Wimpey jumped 4.22p to 10p. Barratt Developments followed suit with an improvement of 5p to 50p.

Leisure and activity break specialist Holidaybreak saw its shares rise 9p to 176p, despite announcing a dividend cut and saying that trading conditions in its city breaks arm had become more challenging amid the economic downturn.

Retailer Moss Bros saw shares plunge 37%, or 10p, to 17p, after billionaire Philip Green ruled out an imminent bid for the company. The Bhs and Arcadia owner had fuelled speculation over a possible bid after snapping up a 28% stake in the menswear chain earlier this month.

The biggest Footsie risers were Kazakhmys up 28p at 269p, Wolseley ahead by 29.5p to 298.75p, Vedanta Resources up 59.5p at 612.5p and Tullow Oil up 48p at 518.5p.

The biggest fallers were Centrica down 8p at 232p, AstraZeneca off 62p at 2322p, Standard Life down 6.5p at 254.75p and Kingfisher down 2.9p at 116.6p.