FTSE Touches 6000

Ivaylo
28 Sep, 2006
New York City

London shares moved higher at mid-day, led once again by a strong mining sector, while persistent bid talk on Hanson and Brambles also supported the FTSE to climb to within reach of the 6,000 level. An upbeat mining sector helped to underpin blue chip gains as commodity prices continued their recovery after recent falls and as ABN Amro advised clients to buy. The UK benchmark gained 31.4 points, or 0.5%.

[R]9:30AM London pushes higher mid-day, Hanson, Brambles up on bid talk.[/R]
The UK benchmark FTSE 100 advanced 31.4 points, or 0.5%, to 5,961.5 by mid-day. Its gain for the week came to 2.3%.

Advancers

The main powerhouse today was the oil sector, with BP up 1.6% and Royal Dutch Shell 1.7% higher. Miners were also stronger, with Vedanta Resources rising 1.9%. The biggest blue-chip advancers was insurer Royal & Sun Alliance, up 4.3%, as it confirmed the sale of the troublesome US operations. Investors welcomed the move, which also removes the main obstacle behind the company being taken over.

M&A speculation still hogs the limelight. Brambles Industries, supplier of pallets, kept on gaining on fading talk of a possible bid from General Electric. Brambles shares rose 4%. Hanson added 3.8% as it continued to benefit from talk that it was being targeted by Cemex of Mexico, the owner of RMC.

Decliners

British Energy fell 0.68% after ING initiated with a sell recommendation, arguing that the share price is still inconsistent with its view of prospective electricity output or selling prices. Inter-dealer broker Icap shed 0.5% after it failed to lift full-year profit guidance despite reporting a particularly active start to its financial year. VT Group was off 2.86% after an in-line trading update prompted investors to book profits.

Dana Petroleum was down 1.84%. The oil and gas producer, announced it remains on course to achieve its target to pump over 40,000 barrels of oil equivalent per day by the end of next year after it unveiled weak first-half profits, hit by foreign exchange losses.

Corporate news

Gerdau, the biggest steelmaker in Brazil, announced it was looking for potential acquisitions, but ruled itself out of making any move to merge with Corus, the Anglo-Dutch steel producer.

SkyePharma reported widened interim losses on Thursday, as research and development expenditure for the development of Flutiform, its key asthma drug, increased significantly.