FTSE riding high at close

The London market closed at its highest level since June 2008 today as Prime Minister Gordon Brown finally fired the starting gun on the general election race.

The FTSE 100 Index was little moved by the announcement of the expected May 6 poll date, but traders instead seized on Friday’s upbeat US jobs figures in their first chance to react after the Easter break.

The Footsie rose near the 5800 mark early in the day amid buoyant sentiment and eventually closed up 35.5 points at a 22-month high of 5780.4.

Dealing rooms were more focused on prospects for the world’s biggest economy on the other side of the Atlantic after the better than expected jobs data fuelled optimism over the US recovery.

The Dow Jones Industrial Average was flat in early trading although investors will take their cue from minutes of the Federal Reserve’s latest meeting due later.

The pound endured a rocky start against the dollar after the jobs news prompted speculation that the Fed could soon raise rates, although it later pulled back to stand just above 1.52. Worries over Greece meanwhile pushed the pound near £1.14 against the euro.

The improved economic sentiment has seen oil prices soaring further in recent days, with crude oil hitting nearly $87 a barrel – the dearest since the peak of the financial crisis in October 2008.

In the UK, oil stocks were higher thanks to the surging cost of crude. BP gained 15p to 646.3p or 2% and Royal Dutch Shell was up 30.5p at 1860p.

Base metal prices were also cheered by the news as Eurasian Natural Resources added 41p to 1266p on a good day for the index’s miners.

In an otherwise quiet day for corporate news, Royal Bank of Scotland was up 0.25p to 44.95p amid reports over bids for the 318 branches it is selling to ease competition concerns.

Virgin Money – one of the main contenders for the branches – today confirmed £100m (€114m) backing from US tycoon Wilbur Ross to help finance its high street bank plans.

Insurer Admiral was a prominent riser after a positive note from Bernstein Research, which suggested the group could claim a 15% market share in the UK and overtake Direct Line as the market leader in the next decade. Shares rose 3%, or 35p to 1367p.

Telecoms firms continued to ease back after last week’s news from Ofcom that it plans to cut charges networks can charge each other for connection. Vodafone fell another 2p to 149.65p.

Drug giants GlaxoSmithKline and AstraZeneca were also under pressure for much of the day as investors moved their money out of more defensive sectors. Astra was down 26.5p to 2919.5p, although Glaxo pulled back losses to finish 3.5p up at 1260.5p.

The four biggest Footsie risers were ENR up 41p to 1266p, Man ahead 7.6p to 252p, Kingfisher up 6.7p to 223.6p and Kazakhmys, which rose 48p to 1630p.

The four biggest fallers were British Airways down 5.6p to 243.3p, Vodafone off 2p to 149.65p, BAE Systems down 5p to 368.8p and Imperial Tobacco, off 25p at 1979p.