FTSE makes further gains

Investors shrugged off fresh economic gloom today as the FTSE 100 Index built on yesterday’s 6% surge with further gains.

Investors shrugged off fresh economic gloom today as the FTSE 100 Index built on yesterday’s 6% surge with further gains.

The London market succumbed to profit-taking early on, but finished the day 88.6 points higher at 4,388.6 – a rise of 2%.

The advances came despite yet more downbeat retail sales figures and manufacturing output falling by a worse-than-expected 1.4% fall during October - extending the worst run for the sector since 1980.

But there were grounds for optimism after slightly better than expected housing sales figures from the US, while the Bank of Canada also slashed interest rates by 0.75%.

Lingering concerns of a cut in production from oil cartel Opec next week also kept oil and gas stocks in favour, underpinning the top flight’s advance.

Leading the charge was insurer Legal & General, up almost 12% or 10.1p to 85.1p, despite worries from analysts over the potential impact of corporate bond defaults on the insurance sector.

It was closely followed by bus and rail group Stagecoach, which gained 13.6p to 128.4p, as the firm’s chairman bought 10,000 shares in the business.

Other prominent risers included Beefeater and Premier Inns leisure group Whitbread, as shares continued to feel the benefit of a robust trading update yesterday. Shares advanced 68p to 885.5p, more than 8%.

Among the fallers, British Airways shed 3.3p to 169.2p after an industry body predicted $5bn (€3.85bn) in losses for airlines this year.

But the leading casualty was Vanish-to-Cillit Bang firm Reckitt Benckiser, which shed 165p to 2615p, a fall of more than 6%. Brokers at Goldman Sachs marked down the household goods sector last week.

Rolls-Royce – another hit by a recent downgrade from Morgan Stanley – also fell, shedding 6.25p to 296.5p.

In the FTSE 250 Index, Johnston Press reversed recent losses with a gain of 12%, or 1.22p to 10p, and DSG International lifted 1.75p to 12.75p.

Plant hire firm Ashtead gained 4p to 35p, after it offered a boost to investors by forecasting that Government spending plans could boost its markets by the end of next year. Half-year profits also rose 7% while Ashtead said it would take a further £45 million of costs out of the business.

Bakery firm Greggs was another riser, up 96p to 3302p, after it outlined expansion plans and said like-for-like sales growth remained in line with an update in early October.

But Carphone Warehouse shares remained under pressure after falling 4% yesterday in the wake of its co-founder’s decision to quit because of his failure to declare the use of shares as backing against personal loans. Shares were down another 4p to 85p.

The four biggest risers were Legal & General up 10.1p at 85.1p, Stagecoach Group up 13.6p at 128.4p, Invensys up 15.9p at 155.3p and Wolseley ahead 35.25p at 382.25.

The biggest fallers were Reckitt Benckiser down 165p at 2615p, Autonomy off 46.5p at 924.5p, Rolls-Royce Group down 6.25p at 296.5p and British Airways down 3.3p at 169.2p.

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