BRITAIN'S leading share index ended 1.7 per cent higher yesterday, with oil stocks gaining on a record high crude price.
The benchmark FTSE 100 index closed 96 points higher at 5,625.9, but finished the first half of the year nearly 13 per cent lo
wer after five years of gains in a row.
The index slipped 7 per cent in June and fell 1.3 per cent in the current quarter, against a drop of 0.2 per cent and a rise of 4.8 per cent respectively last year.
Neil Parker, market strategist at Royal Bank of Scotland, said: "The market is readjusting. We are in a new environment where profits are expected to be lower because the activity is lower."
Commenting on yesterday's share movements, Paul Webb, chief dealer at CMC Markets, said: "Positive sentiments spanning a number of the mining stocks is lifting this sector as a whole, while resurgent oil prices are helping the petrochemicals stocks too, but the counter here is that the big oil users are struggling."
Oil and gas heavyweights featured strongly among the Footsie risers after oil prices reached a new record of almost $144 a barrel on the back of Middle East tensions. BP rose more than 3 per cent, or 18p, to 583.25, while Royal Dutch Shell was 58p higher at 2,020p.
Takeover talk in the mining and telecoms sectors also offered support. Speculation that steel giant Lakshmi Mittal could make a move for Rio Tinto helped boost shares nearly 3 per cent, or 166p, to 6,009p while Anglo American – said to be eyeing both BHP Billiton and Rio's assets if a merger of the two goes ahead and forces disposals – gained 130p to 3,526p.
Mobile phone giant Vodafone also enjoyed a positive session after revealing a music tie-up with social networking site MySpace. This and talk of a possible float in Qatar helped the shares advance more than 5 per cent, or 7.45p, to 149.15p.
ITV was the top flight's worst performer, however, after downbeat comments on prospects for media companies from Deutsche Bank, which cut the broadcaster's target price.
News that the launch of its Kangaroo video-on-demand service joint venture with Channel 4 and the BBC would be delayed by a competition referral also sent ITV 6 per cent, or 2.8p lower, to 44.7p.
In the FTSE 250, profit warnings rocked several firms. Southern Cross – the UK's biggest care home operator – saw shares lose nearly two-thirds of their value after warning over profits. Shares plunged 58 per cent, or 183p, to 130p.
Daily Record publisher Trinity Mirror also suffered a share blow after a profit warning. It said full-year operating profits were set to come in around 10 per cent less than market expectations, sending shares down 28 per cent, or 42.5p, to 109p.
Housebuilder Taylor Wimpey was down for much of the day after write-downs on its land banks and work in progress totalling £660 million, but finished unchanged at 62p.
The full article contains 533 words and appears in The Scotsman newspaper.
