Strong corporate results and positive broker research buoyed the FTSE today, leading the market to its highest close in more than two months.
The FTSE 100 closed 0.9 per cent higher at 6.069.36 in low volumes following the long Easter weekend and ahead of a second four-day weekend to celebrate the Royal wedding and Mayday.
Anticipation of higher trading following these two holidays pushed British Airways owner International Consolidated Airlines Group to the top of the risers board, to close up 4.5 per cent at 229.6p.
Technology stocks performed well, led by processor maker ARM Holdings, which remained in demand all day after stellar earnings results from its US clients Intel and Apple last week. It closed up 3.4 per cent at 625.5p
Energy companies also rose, boosted by ongoing high oil prices.
Indian energy conglomerate Essar Energy rose three per cent to finish at 453.2p after its chief executive Prashant Ruia at the weekend said more parts of the business could be listed in London following its first float last year.
“The biggest sector riser is oil and gas, with Brent crude prices remaining high on continued unrest across the Middle East. Royal Dutch Shell leads the sector after a positive note from UBS,” said CMC Markets analyst Michael Hewson.
Telecoms operators Vodafone (up 2.3 per cent at 172.95p) and BT (also up 2.3 per cent at 193.3p) gained ground.
Other companies to gain from the improvement in sentiment were retailer Tesco, up 2.9 per cent to 406.7p; temporary power supplier Aggreko, which is benefiting from contracts in Japan and ended up 2.6 per cent at 1,710p; and engineer GKN, up 2.4 per cent to 216.3p.
Miners fared poorly, with Randgold Resources slipping 2.1 per cent to 5,195p and Anglo American, Vedanta Resources and ENRC also losing ground.
On the FTSE 250, software company Micro Focus gained 6.8 per cent to 360.8p after it admitted it was in very early stage talks with a potential buyer.
Heritage Oil also gained 5.3 per cent to end at 257.2p after announcing that it would begin a share buyback programme to reduce the gap between its asset value and its share price.
US markets also opened higher after major corporates such as Ford, Coca Cola and UPS delivered heartening quarterly results and the Conference Board's consumer confidence index rose more than expected in March.
The Standard & Poor’s index rallied to its highest level since June 2008 on the updates from the market’s bellwether companies.
The Dow Jones industrial average finished up 108.45 points, or 0.87 per cent, at 12,588.33. The S&P 500 Index ended up 11.12 points, or 0.83 per cent, at 1,346.37. The Nasdaq Composite Index closed 19.66 points, or 0.70 per cent, higher at 2,845.54.
“Barring any shocks here and taking into account the enthusiasm for US shares at the moment, many are starting to think that it can only be a matter of time before the FTSE shakes off the sideways range it has been in for the last few months and follows American markets higher,” said IG Index chief market strategist David Jones.
“The catalyst may well be getting Wednesday’s UK GDP data out of the way – as long as it is around the 0.5 per cent expected, we could well see a rally into the long weekend.”