FTSE hits one-month high, but rally fades
Traders toasted a one-month high for the FTSE 100 Index today before miners dragged the top flight back towards its opening mark.
The renewed appeal of riskier stocks meant the Footsie added 40 points early on as the London market built on steady gains seen in recent sessions.
But the rally ran out of steam, with the Footsie 2.9 points lower at 5349.1 as commodity stocks gave up initial progress due to a stronger dollar.
Investors are braced for further volatility as the full-year results season will step up gear later this week with figures from Lloyds Banking Group, Royal Bank of Scotland and British Gas owner Centrica.
The pound weakened during the session as traders reacted to a largely downbeat outlook from Bank of England Governor Mervyn King, fuelling speculation that more action on quantitative easing could be on the way.
The market uncertainty failed to dent progress by building supplies firm Wolseley, which stood 12% higher after upgrading the City’s profit expectations.
Even though Wolseley said the improvement was based on cost efficiencies rather than better economic conditions, shares added 172p to 1621p.
Other risers included pharmaceuticals giant AstraZeneca after it said it would pay £505m (€573m) to HM Revenues & Customs in order to resolve all claims relating to a tax issue dating back 15 years.
The first instalment of £350m (€397m) will be paid in March and will lead to a lower tax rate and better earnings per share guidance. Shares rose 29p to 2839p.
Banking stocks were in mixed form, with Barclays down 5.5p at 310.7p and HSBC 3.6p higher at 702.4p after strong gains earlier in the session.
RBS and Lloyds geared up for their results with rises of 0.1p to 35.9p and 0.5p to 52.2p respectively.
Elsewhere, car dealership Pendragon rose quarter of a penny to 25.25p, after it posted underlying
pre-tax profits of £10.1m (€11.4m) in the 12 months to December 31, compared with a loss of £33.6m (€38.17m) in 2008.
It has been boosted by signs of recovery in the luxury end of the market, but warned that the volume segment could struggle until 2011.
Nightclub operator Luminar fell 0.25p to 33p after the announcement that founder Stephen Thomas will step down from his role as chief executive at the end of this month and be replaced by former Zavvi boss Simon Douglas.
