LONDON'S index of the leading 100 shares reached its highest point for nearly two months yesterday as better-than-expected figures on the US economy cheered investors.
The benchmark FTSE 100 index added 73.1 points, a gain of 1.3 per cent, to
close at 5,601.2 with US-facing businesses such as heating and plumbing giant Wolseley among the Footsie's leading performers as the top flight reached highs not seen since the beginning of July.
Wolseley has been battered in recent months by the plummeting US housing market but last night gained 6 per cent, or 24.5p, to 442p.
Darren Winder, equity strategist at Cazenove, said: "The better-than-expected data out of the US is helping the market.
"The other thing helping the market fundamentally is that the yield on ten-year gilt is now down to 4.5 per cent, so the hurdle for equities to climb to match the yield on bonds is falling.
He added: "We have got the weak (UK] economic conditions to contend with but the market has been expecting that for so long, so they are not really a surprise to equity investors."
Banks were the top-weighted gainers in the top flight, with HBOS, Barclays, Royal Bank of Scotland, HBSC, Lloyds TSB and Standard Chartered rising between 2.5 and 5.8 per cent.
Insurers were also enjoying a stronger showing, with RSA Insurance up 8.3p to 154.1p on renewed talk of bid interest from Zurich Financial Services. Both RSA and Zurich Financial declined to comment.
The leading blue-chip riser, however, was supermarket giant Sainsbury's, which gained almost 8 per cent, or 25.25p, to 344p late in the session on vague takeover rumours.
Moving the opposite way amid worries over the impact of tropical storm Gustav on the Gulf of Mexico region were Shell, down 2p to 1,878p, BP, 3.5p lighter at 522.25p, and BG Group, was 7p lower at 1,187p.
Oil prices were volatile all day, above $120 a barrel thanks to the nerves, before edging back to about $118.
Another busy session for corporate results focused attention on the FTSE 250 index, with Premier Foods down 5.25p to 92p after a 29 per cent fall in half-year profits. The Hovis maker said it remained on track to meet full-year forecasts, but analysts were concerned about its debt position and rising costs.
Property consultancy Savills offered a gloomy assessment on the house market, but received a positive reaction in the City after its half-year figures came in ahead of expectations.
Shares shot to the top of the second tier's risers' board, up 41.25p to 283.75p, a rise of 17 per cent, as investors welcomed the decision to maintain the half-year dividend.
Elsewhere Taylor Wimpey was up 5p to 53.25p as shares bounced back following heavy falls seen alongside Wednesday's gloomy interims. The recovery came despite Nationwide's figures showing double-digit annual falls in house prices.
The full article contains 523 words and appears in The Scotsman newspaper.
