BRITAIN'S blue-chip share index ended 0.6 per cent higher yesterday, boosted by oil companies tracking rising energy prices, while fellow heavyweight stock Vodafone headed south.
The benchmark FTSE 100 climbed 35.4 points to 5,636.6, an advance
of 4.2 per cent in August, but is still down 12.7 per cent for the year to date.
Oil stocks led gainers as US crude prices rose above $117 a barrel as Tropical Storm Gustav was poised to enter the Gulf of Mexico, raising concerns about its impact on US offshore oil and gas output.
Oil and gas services firm Petrofac topped the FTSE 100 leaderboard, up 5.1 per cent at 652.5p. The company said it has bought production technology firm Caltec for a maximum of £30 million.
Nick Batsford, an analyst at Hobart Capital Markets, said: "The outlook for economic growth and corporate profits is far from great and any fundamental improvement will take time given the excesses that have built up over the last few years.
"I have no idea whether or not we've hit rock bottom. (But] the bulls are still tentatively on the field, they have the ball and therefore I must run with the strongest plays."
The recovery by financial firms, amid hopes the worst of the credit crunch may be over, saw HBOS rise 10.25p to 315.75p, Royal Bank of Scotland improve by 4.75p to 234.75p and Barclays lift 3.5p to 353p.
Sainsbury's enjoyed some strong gains after market rumours of a 500p a share takeover approach, but the rise gradually eased to leave the shares up just 3.75p at 347.75p.
RSA Insurance, meanwhile, lost hold of gains seen in the previous session amid speculation of a bid from Zurich Financial Services. The stock slipped 2 per cent, or 3.3p, to 150.8p, while, among life insurers, Prudential was 6.5p lower at 548p and Legal & General fell 1.3p to 100.5p.
Vodafone was one of the market's biggest top-flight fallers, down 1 per cent, or 1.8p, to 141.05p amid fears about slower consumer demand and a pricing crackdown by the European Commission.
The main corporate action involved stocks outside the top flight, with Bradford & Bingley and the Restaurant Group – owner of the Frankie & Benny's chain – among those reporting results.
As expected, B&B interims were grim with bottom-line losses of £26.7m and widening arrears. While analysts said there were no surprises in the results, shares were still down 1.25p at 49p.
Restaurant Group impressed investors after a 20 per cent rise in first-half profits and a steady start to the second half of the year. Shares rose nearly 6 per cent, or, 7p to 139p.
But Sunlight linen hire business Davis Service Group slid 16 per cent after it scaled back expectations for this year and next. The group said lower hotel occupancy rates were impacting on its Sunlight business in the UK. Shares tumbled 64.5p to 341p.
The full article contains 525 words and appears in The Scotsman newspaper.
