London close: Late rally sends Footsie higher

03.01.2008

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London's blue chips staged a strong rally near the close as oil stocks combined with a bright opening on Wall Street to encourage the buyers.

Oil shares were in demand as the crude price surged to new records yesterday with oil prices breaking through the $100 mark for the first time. Tullow Oil, BP and Royal Dutch are did well as the price of crude stayed close to three-digits.

Miners had a volatile day but finished on an upswing, led by Lonmin, Kazakhmys, Vedanta and Xstrata.

Alliance & Leicester is up again following the excitement of bid talks with Abbey owner Banco Santander.

The retail sector, though, remains a scene of carnage. Next is the Footsie's biggest faller after it said its outlook for 2008 remains extremely cautious, although 2007 profits are expected to be slightly ahead of expectations.

Shares in DSG International are down by a quarter after the electricals retailer warned that full-year pre-tax profits will be some £40-£50m lower than expected due to weaker trading and a more cautious outlook for the remainder of the year. Rival Kesa is also down heavily while Next's comments have hit Home Retail, Kingfisher, Findel and Halfords.

Other consumer stocks are also suffering. Travel group TUI and pub owner Enterprise have both given ground on fears consumers are pulling in their horns after Christmas.

Down a division, mining and oil stocks were also prominent among the risers with Aquarius Platinum leading the way helped by the price of the precious metal moving upwards in line with gold and oil. Hochschild Mining was also sharply up. Premier Oil and Dana Petroleum benefited from higher oil prices to finish in the top ten percentage risers of the FTSE 250.

Support services and construction firm Carillion has achieved financial close on the £175m South Tyneside and Gateshead Building Schools for the Future (BSF) programme.

PR Newswire owner United Business Media has expanded its multicultural offering through the acquisition of HispaniMark, a news agency serving the Hispanic market.

Data search software specialist Autonomy has won a $70m deal with an unnamed major global bank.

Shares in broadband data and telecoms systems designer BATM Advanced Communications surge ahead as the company said 2007 results will exceed market expectations.

Residential property services provider LSL Property said it is reviewing strategic options for its conveyancing division, which continues to underperform and will incur an impairment charge in the year of £1.5m.

Wine warehouse retailer Majestic Wine raised a glass to strong December trading, which helped it post a like for like sales increase in the 9 week Christmas trading period.

SkyePharma is up on US approval for all four dosage strengths of the new blood pressure treatment Sular.

Oil explorer Island Oil & Gas is wanted after it emerged that Supernova Ireland Resources, a member of the Dutch Bluewater Group, purchased 3.75m Island shares at 60p each, giving it a 3.22% stake in the enlarged share capital of the company.

Bombed out property support services firm Erinaceous received some much needed good news, as it announced it had come to an amicable cash-free settlement with property investment company Regis over the acquisition by Erinaceous of Mount Street Holdings.

FTSE 100 - Risers

Tullow Oil (TLW) 681.00p +5.58%

Lonmin (LMI) 3,201.00p +4.37%

Vedanta Resources (VED) 2,165.00p +4.24%