London’s blue chip share index soared almost 2% today amid encouraging news on the US housing market and a new record for gold prices.
Stocks were back in vogue as a weak dollar pushed up commodities, while better-than-expected American home sales boosted economic recovery hopes.
The FTSE 100 Index ended the day up 104.1 points at 5355.5 after an afternoon surge, spurred on by a steep early rise on Wall Street.
US home sales data released today showed a 10.1% rise in October to the highest level in two and a half years, compared with a 1.4% increase expected by analysts.
The Dow Jones Industrial Average jumped 1.4% in early trading after the report.
In London, traders shrugged off the jitters of the previous week as the heavyweight mining sector reaped the rewards of the rising gold price, although there were increases across the board and only a handful of Footsie stocks were in negative territory.
Fresnillo led the sector with a 4% rise, up 37.5p at 913p.
Meanwhile gold miner Randgold Resources rose 170p higher to 5120p as gold hit another new record above 1173 dollars an ounce at one point.
Banks were also among today’s winners, led by Royal Bank of Scotland, up 1.805p to 37.8p.
Barclays was also on the front foot amid reports it had restarted talks over selling its private equity unit. The shares added 10.25p to 314.5p.
Lloyds Banking Group rose 3.32p to 91.47p. The bank gained strong support for its debt-swapping plans and investors are awaiting tomorrow’s announcement of pricing details on its up-coming £13.5bn (€14.9bn) rights issue.
Hopes of a bidding war for Cadbury also helped the Dairy Milk maker advance.
The chocolate giant ticked up again to reach its highest level this year – up 13.5p to 814p – after weekend reports fuelled expectations that Kraft’s hostile offer could be trumped by fellow US firm Hershey.
In the FTSE 250, broadcaster ITV was 1.65p ahead to 53.9p after more speculation that new chairman Archie Norman was considering charging for some channels as well as a board clear-out after its recent mishandling of top-level appointments.
Fellow second tier stock Northumbrian Water was up 6p at 250p as investors warmed to higher pre-tax profits. But the firm had fallen in earlier trade after it said it continued to be affected by rising business failures in the North-East.
Transport group National Express was a faller in the second tier, sinking 4.8p to 362.1p although the company’s biggest shareholder, Spain’s Cosmen family, raised its stake in the firm to 19.5%.
Elsewhere, Blacks Leisure jumped nearly 50% – up 13.25p to 40p – after creditors voted in favour of its restructuring plans.
The biggest Footsie risers were Royal Bank of Scotland up 1.805p at 37.8p, ICAP up 18.9p at 439p, Fresnillo up 37.5p at 913p and Kazakhmys up 54p at 1320p.
The biggest Footsie fallers were Petrofac down 12.5p at 998.5p, Bunzl down 7.5p at 637.5p, Intertek down 11p at 1212p and Tullow Oil off 4p at 1256p.