The FTSE 100 yesterday advanced to its highest level in more than a month, as a rise in mobile operator Vodafone and supermarket retailer Sainsbury offset a slump in energy stocks.
The blue chip index closed up by 0.2 per cent, or 16.15 points, at 6,627.40 points – its best closing level since late September.
The shares of Vodafone, the world’s second-biggest mobile operator, rose 5.4 per cent to 219.05p, after the company lifted its earnings outlook.
But smaller rival TalkTalk dropped 5.33 per cent to 280.80p after it warned of higher than expected costs for adding new customers.
Sainsbury advanced 5.7 per cent to 269.10p, which traders said reflected investors cancelling negative “short” bets on the stock ahead of the retailer’s interim results tomorrow.
InterContinental Hotels rose 3.4 per cent to 2,537p after activist hedge fund Marcato Capital Management again urged the chain to merge with a rival, saying a tie-up could help the company’s share price more than double.
However, energy stocks such as BP and Royal Dutch Shell weakened after the price of Brent crude oil fell close to four-year lows.
BP closed down 1.33 per cent at 433.75p, while Royal Dutch Shell A shares fell 0.67per cent to 2,219.50p.
United Utilities was in the spotlight, up 2.26 per cent to 883p, valuing it at around £6bn, on renewed talk of possible bid interest from Canada’s Ontario Teachers Pension Fund or perhaps Kuwaiti investors, with a price of up to 1,200p a share mentioned.
Commodity companies were weaker on worries about slowing demand from China, with Anglo American down 1.36 per cent at 1,342p and Rio Tinto losing 1.26 per cent to 2,986p, not helped by Citigroup cutting its estimates on iron ore prices.
Mike Ashley’s Sports Direct International lost 4.49 per cent to 627p after news it would open a discount gym chain.
Among the mid-caps, engineer Renishaw rose 9.90 per cent to 1,943p following better-than-expected results, while bid speculation pushed Bwin.party Digital Entertainment 4.97 per cent higher to 107.80p.
Taylor Wimpey gained 4.18 per cent to 122.20p after it raised its forecast for profit margins thanks to higher prices and increased sales.