FTSE continues run of gains

London’s blue chip market broke through the 6,000 mark for the first time in more than a month today as its run of gains continued despite falls in the banking sector.

The FTSE 100 Index closed up 27.8 points at 6017.5 as it continued to build on its recent rally which started when Greece agreed tough austerity measures, making it less likely it will will default on its debt payments.

However, its gains were moderated today after ratings agency Standard & Poor’s warned that French banks’ plans to roll-over Greek debt could be treated as a default. This caused shares to fall in some of the biggest UK-based banks.

The pound was up against the euro, at 1.11, after the single currency slid following S&P’s warning. Sterling was flat against the US dollar at 1.61.

Food and drink companies were among the biggest risers after talk of mergers and acquisitions boosted the sector. This included speculation that Nestle will bid for a Chinese candy maker Hsu Fu Chi International.

Shares in Grolsch brewer SAB Miller rose 24.5p to 2290p on speculation that it could make an increased bid for Foster’s.

Other risers included Marmite maker Unilever, up 25p to 2037p, and Guinness giant Diageo ahead 15p at 1297p.

In the FTSE 250 Index, Mr Kipling maker Premier Foods rebounded following last week’s profits warning. Shares were up 1.6p to 18.7p.

Energy stocks were also on the rise after a slight hike in oil prices, with BP and Royal Dutch Shell among the winners.

Essar Energy also gave support to the market after confirming that a meeting to rubberstamp its acquisition of an oil refinery in Cheshire will take place later this month.

The Indian-owned group said it expects to complete its 350 million US dollar acquisition of the Stanlow oil refinery from Shell on July 31. Shares were up 6.1p to 422.1p.

Temporary power provider Aggreko was ahead 36p at 1980p after Citigroup lifted its target price and earnings forecasts for the firm. Citi upgraded the target after a strong performance from the international power division.

The banking sector was hit by renewed fears over Greece, with Lloyds Banking Group dropping 0.9p to 49.9p, Royal Bank of Scotland shedding 0.6p to 39.1p, and Barclays off 2.9p at 262.7p.

Outside the top flight, shares in troubled care home operator Southern Cross Healthcare were flat after after one of its landlords, Four Seasons, said it would take back all 45 of its leased homes and run them itself.

Some analysts believe if Southern Cross can restructure as a smaller group it is more likely to survive. But shares closed at 7p after losing earlier gains.

The biggest Footsie risers were Wood Group up 32p at 694p, Arm Holdings ahead 16p at 609.5p, British Land up 14p at 629.5p, and Pearson ahead 25p at 1202p.

The biggest Footsie fallers were Cairn Energy down 13.8p at 404.7p, Lloyds Banking Group off 0.9p at 49.9p, Glencore down 8p at 481.1p, and Royal Bank of Scotland off 0.6p at 39.1p.