London market up ahead of Easter break

The London market rose more than 1% today to hit a 22-month high as investors embarked on the Easter holidays buoyed by recovery hopes.

Miners were the pick of the risers as a weak dollar and positive economic news helped the sector.

The FTSE 100 Index rose 65.3 points to 5744.9 in the wake of strong trading on Wall Street after upbeat survey data showing the best performance for US manufacturers since 2004. The Dow Jones Industrial Average rose 0.7%.

This also followed a UK survey showing the fastest pace of growth from the sector in 16 years.

In currency news the pound rose to above 1.12 against the euro while it also gained to 1.52 against the dollar.

The weakness of the dollar and recovery hopes pushed up the cost of base metals such as copper and nickel, boosting commodity stocks. Xstrata was the strongest performer in the mining sector, with shares up 51.5p to 1300p or 4%.

In the meantime oil prices extended a two-month rally to head above 84 dollars a barrel, helping oil and gas services firm Petrofac and prospector Cairn Energy lead blue-chips higher. The duo rose 84p to 1286p and 16.5p to 433.5p respectively.

Meanwhile Vodafone was one of only a handful of firms on the back foot amid plans to cut mobile phone charges.

Regulator Ofcom’s ruling sparked worries over the impact on Vodafone’s profits and shares initially tumbled 1%, although they recovered later in the day to end 0.2% down or 0.3p lower to 151.7p.

Aside from Vodafone, the few top flight stocks in the red were in defensive sectors as investors’ appetite for risk increased.

Drugs firms Shire and GlaxoSmithKline fell 6p to 1448p and 8.5p to 1257p respectively, while Embassy maker Imperial Tobacco eased 6p to 2004p.

BSkyB, which was also the subject of a ruling by Ofcom yesterday, continued to rally after investors expressed relief that the regulator did not go further in its determination on wholesale prices for sports content. Shares were up another 10.5p to 612.5p.

In the FTSE 250, babycare retailer Mothercare was a major casualty, losing 10.5p to 590p or 2% after reporting its first drop in UK like-for-like sales for 19 quarters. Comparative sales slid 1.6% in the 11 weeks to March 27.

Asset management house Gartmore remained in the spotlight following Tuesday’s shock news of the suspension of one of its star fund managers which saw shares plunge 31%.

The stock continued its fightback today after yesterday’s 8% bounce-back, adding a further 16p to 141p or 13%.

Spread betting firm IG Group also gained 14.1p to 416.3p, or 4%, following regulatory changes which should help its US business.

Meanwhile Ryanair added 8% after it said a surge of bookings in the past month at higher prices had added a further €25m to profit expectations.

The biggest Footsie risers were Petrofac up 84p at 1286p, Xstrata up 51.5p at 1300p, Randgold Resources up 205p at 5220p and Cairn Energy up 16.5p at 433.5p.

The biggest Footsie fallers were Smith & Nephew down 4.5p at 652p, GlaxoSmithKline down 8.5p to 1257p, Segro off 1.6p to 318p and Shire down 6p to 1448p.