Encouraging rise for FTSE

The FTSE 100 Index entered the second half of the year with a more than 2% rise today as positive world manufacturing data helped boost hopes of economic recovery.

UK, US and European figures all indicated that the manufacturing sector, while still in decline, was gradually returning to health.

The FTSE closed up 91.5 points at 4340.7 today amid stock markets rises across the world.

In the UK the Chartered Institute of Purchasing & Supply’s (CIPS) report said output in the industry rose for the first time since March 2008 last month, while its overall activity index was at a 13-month high.

Wall Street was also buoyed by similar survey data of easing decline for the sector and the Dow Jones Industrial Average rose more than 1% in early trade.

In London, mining and energy stocks saw strong advances amid a bounce back in commodity prices following falls yesterday, including a gain in the cost of oil as benchmark crude for August delivery rose above 70 dollars a barrel on the New York Mercantile Exchange.

Vedanta Resources set the pace with a rise of 10% or 127p to 1415p, while Antofagasta lifted 37p to 624.5p and gas explorer BG improved 43p to 1061p.

Oil major BP was 12.2p higher at 490p and rival Royal Dutch Shell added 30p to 1556p.

Improving sales figures from retail giant Marks & Spencer sent its shares up 4% after it reported a better-than-expected 1.4% drop in first quarter like-for-like sales.

M&S was one of the leading risers after executive chairman Stuart Rose said he saw a more stable picture for consumer confidence. Shares lifted 11.5p to 317.5p.

The group’s first quarter sales showed a marked improvement on previous quarters.

Its upbeat outlook also boosted rivals, with Next up 57p at 1526p, B&Q owner Kingfisher ahead 6.9p to 184.7p and Argos firm Home Retail Group 5.25p stronger at 265.25p.

British Airways was one of the few fallers amid the increased threat of industrial action over the busy summer months. Its shares declined 0.7p to 124p.

In the FTSE 250, National Express shares slumped 8%, or 25.5p to 284p, after the company failed to renegotiate its loss-making East Coast rail franchise with the British government, meaning it is likely to walk away from the service by the end of the year.

The company added to its woes by admitting it faced up to £20m (€25m) in first-half losses on the East Coast franchise, with revenues up by just 1%.

Elsewhere, Cineworld – the UK’s second largest cinema chain – rose 5.25p to 148p after saying big screen blockbusters such as 'Slumdog Millionaire' and 'Transformers' were expected to have boosted pro-forma half-year box office revenues by 17.9%.