Good news boosts FTSE to 2008 levels

BANKS and miners dominated the FTSE today, leading the index to another 31-month high as good news from Portugal’s bond sale boosted financial stocks, and miners tracked metals prices higher.

Four FTSE 250 companies also posted double-digit gains as news that Gartmore agreed a £335.3m takeover deal by rival Henderson sent their shares higher.

The FTSE 100 finished in positive territory for the second day in a row, up 36.69 points, or 0.6 per cent, at 6,050.72

The close is its highest since early June 2008.

Miners were the main driver for the index, with ENRC, Vedanta and Kazakhmys all gaining 4.36 per cent, 4.27 per cent and 3.66 per cent respectively.

Vedanta soared after India’s oil minister said he saw no problem with its acquisition of assets from Cairn Energy, meaning the deal could be cleared by the end of the month. 

HSBC was the best performing financial, up 3.8 per cent, after Barclays Capital analysts gave it a "buy" recommendation, but fellow banks Standard Chartered and Barclays were also in demand.

Life insurers Aviva and Legal & General were also among the biggest risers, moving up 3.13 per cent to 421.30p and 2.83 per cent to 109p respectively, as investor fears over the eurozone lessened.

Among the fallers, auto part maker GKN lost 2.61 per cent of its value, or 230.90p.

Michael Hewson, market analyst at CMC Markets, said the stock had “slipped back from its highest levels in three years as profit taking starts to kick in.”

Supermarket group Sainsburys fell 2.15 per cent to 382p despite the company beating analyst forecasts to report its best-ever Christmas, with sales at stores open over a year up 3.6 per cent, excluding fuel but including VAT.

In the FTSE 250, fashion retailer SuperGroup closed up 19.42 per cent at 390p after predicting top-end profits following its best ever Christmas. It almost doubled retail sales during the nine weeks to 2 January.

Fund managers Gartmore and Henderson also added 13.7 per cent and 9.3 per cent respectively after announcing their merger.

Bakery chain Greggs like-for-like sales rose 0.6 per cent over the Christmas trading period while total sales climbed 3.5 per cent as shoppers homed in on its coffee and mince pies.

In the US the market also saw a boost from Portugal’s successful bond sale.

“US markets have made new two-and-a-half year highs today as the S&P looks to test the 1,300 level on the back of this morning’s successful Portuguese bond auction and optimism about the forthcoming US earnings season,” Hewson said.