FTSE close: Antofagasta up, Next down

By This Is Money
Updated: 12:36 EDT, 29 December 2009

17.25:

The FTSE 100 Index today returned to the level seen prior to the collapse of Lehman Brothers after stocks notched up a fifth straight session of gains.

London's blue chip share index rose another 35.2 points to 5437.6 - above the close of 5416.7 recorded on the last trading day before the US investment bank went under in September 2008 and triggered the global financial crisis.

Today's gains were helped by holiday-period trading volumes as stocks built on a pre-Christmas rally that has added more than 200 points in the space of a week.

Other stock markets have also been making steady headway amid the New Year optimism, with the Dow Jones Industrial Average on Wall Street last night closing at a new 2009 high.

The Dow was up 10 points in early trade, with hopes firm for a seventh consecutive day of gains in New York as better readings on home prices and consumer confidence gave US trading a boost.

In UK currency news, the pound was down slightly against against the euro and the dollar, off 0.8% to 1.59 dollars and 0.5% down to 1.11 euros.

But focus was firmly on the Footsie's landmark return to pre-Lehman levels, with the top flight at one stage hitting above 5445.

It is a far cry from the 3500 level seen in March as investors dealt with the fall-out from Lehman's demise and continued uncertainty over the economic recovery.

Commodity stocks drove the latest improvement in London after dollar weakness helped lift copper prices to a 15-month high and oil prices remained close to 80 US dollars a barrel.

Among the miners, Antofagasta led the way with a rise of 37p to 972.5p. The optimism spread to the UK property sector, with Liberty International 24p stronger at 510.5p and Segro 10.7p higher at 343.7p.

Temporary power firm Aggreko, which joined the FTSE 100 last week, rose 17.5p to 927.5p.

Meanwhile, energy giants BP and Royal Dutch Shell saw a mixed session as oil prices hovered around 78 US dollars a barrel. BP surrendered initial gains to stand 3.5p lower at 605p, while its rival added 5p to 1835p.

British Airways shares were also in focus after the alleged bomb attack on a US plane on Christmas Day. Shares in US airlines were down by as much as 4% overnight and BA fell by 2%, off 3p to 189p, amid concerns over the potential impact of additional security checks on transatlantic flights.

A number of top flight fallers came from the retail sector as investors took up cautious positions ahead of trading updates due next week. Next was among those in the red, dropping 3p to 2062p.

The Footsie's biggest risers were Liberty International ahead 24p at 510.5p, Antofagasta up 37p at 972.5p, Lonmin up 61p at 1941p and Segro ahead 10.7p at 343.7p.

The Footsie's biggest fallers were Randgold Resources down 95p at 5075p, British Airways off 3p at 189p, Autonomy Corporation down 13p at 1507p and British American Tobacco down 15p at 2017.5p.

12.30

The FTSE 100 index was 41.7 points up at 5,444.2.

'The States and Asia have done pretty well on their normal weekend if you like, and I think that London's just getting up to speed again,' said Tim Hughes, head of sales trading at IG Index.

Kazakhmys put on 23p to 1,311p after the Kazakh copper producer secured a bigger-than-expected $2.7bn loan from China. It is a sign of strengthening ties between the two countries, the head of Kazakhstan's state welfare fund said.

Real estate stocks also featured on the blue-chip leaders' board as bargain hunters homed in on a sector seen by analysts as among the most undervalued.

Britain's largest shopping mall owner Liberty International was the biggest FTSE 100 riser, up 20.5p to 507p, as people crammed the stores, lured by post-Christmas sales.

11.00

The FTSE 100 index was 26.3 points ahead at 5,428.7.

'The Santa rally hasn't petered out yet and I think we'll be on a forward trajectory until we get into January and start to re-evaluate things,' said Howard Wheeldon, strategist at BGC Partners.

Retail bellwether John Lewis reported a strong online start to its seasonal clearance sale, adding to signs shoppers might be out in force ahead of a rise in VAT on New Year's Day. It also reported a strong online start to its seasonal clearance sale.

• Markets around the world moved higher yesterday, driven by stronger-than-expected manufacturing data in Japan and improved hopes for economic recovery.

Most European bourses recorded further gains, while on Wall Street, the Dow ticked up yesterday on better-than-expected consumer retail spending data, trading around 15 points higher at 10535.14 early on, before dropping again later in the day.

News that Japan's factory output rose the most in six months may help avoid a slide back into recession next year. The Nikkei stock index rose 1.3% to its highest since late August.