Large caps break 5,000 as travel gets its day in the sun

THE FTSE 100 ended a week of waiting yesterday to pull itself above the 5,000 level by the close. The benchmark index rose by 1.2 per cent on the back of strong oil and bank stocks, as well as early gains on Wall Street.<br /><br />By the close the index was 56.96 points higher at 5,004.30, extending the recent rally to a fourth straight session.<br /><br />&ldquo;Rising oil prices and the return of M&amp;A interest has kept the FTSE rally going, helping the index pop back above the 5,000 level,&rdquo; said Mic Mills, senior trader at ETX Capital.<br /><br />&ldquo;But while no one wants to be left behind the next move upwards, that 5,000 level will need more help to be breached significantly,&rdquo; Mills added.<br /><br />Oil and gas producers were the best blue chip performers as crude prices moved above $71 a barrel. <strong>BG Group, BP, Royal Dutch Shell</strong> and <strong>Cairn Energy</strong> added 1.9 to 4.2 per cent.<br /><br />Most banks moved higher, with <strong>HSBC, Barclays, Royal Bank of Scotland</strong> and <strong>Standard Chartered</strong> up 1.0 to 3.2 per cent. But <strong>Lloyds Banking Group</strong> missed out, falling 0.7 per cent.<br /><br /><strong>British Airways</strong> was the top FTSE 100 riser, up 5 per cent, drawing strength from recent signs of a pick-up in the air travel industry and hopes for takeovers.<br /><br /><strong>Thomas Cook Group</strong> was also in demand, up 4.6 per cent on market talk that banks holding insolvent German retailer Arcandor&rsquo;s 43.9 per cent stake in travel firm are close to announcing a placing of the stock.<br /><br />The move would eliminate an overhang which has weighed on Thomas Cook shares since Arcandor filed for insolvency in June.<br /><br /><strong>Cadbury</strong>, however, slipped 0.1 per cent. Its shares have rocketed since it was announced on Monday that it had rejected a &pound;10.2bn bid approach from the US&rsquo;s biggest food group Kraft.<br /><br /><strong>Lonmin</strong> was the biggest blue chip faller, dropping 2.8 per cent as Merrill Lynch downgraded the shares to &ldquo;neutral&rdquo;, saying prospects of a merger with Xstrata were &ldquo;less than certain&rdquo;. <strong>Randgold Resources</strong> fell 1.9 per cent as the price of gold edged back below $1,000 an ounce.<br /><br />Other miners were mixed, with <strong>Xstrata, Kazakhmys</strong> and <strong>Anglo American</strong> up 0.5 to 2.7 per cent, but <strong>Rio Tinto, BHP Billiton, Fresnillo</strong> and <strong>Eurasian Natural Resources</strong> fell 0.1 to 1.4 per cent.<br /><br />Gains on Wall Street helped fuel the rally, with US blue chips up by 0.8 per cent by London&rsquo;s close as strength in industrial shares was countered by weakness in retailers.