FTSE100 reaches its highest close in five years

FTSE100 reaches its highest close in five years

	Published : Thu, 06 Apr 2006 08:35 By : Cedric Benson Print this Story

LONDON: Britain's benchmark share index FTSE100 reached its highest close in more than five years Wednesday after a roller-coaster session, with mining shares climbing up and Scottish & Newcastle gaining on speculation that it is in acquisition talks. The index rose 39.4 points, or 0.7 per cent, to close at 6,044.1, the highest since February 2001.

The index was also influenced by speculation over mobile phone operator Vodafone and medical devices maker Smith & Nephew. Its gains were, however, checked by mid-cap share easyJet, which shed about 9 per cent as one of its investors, Icelandic firm FL Group, sold off its entire holding in the company, thereby putting a lid on an acquisition speculation.

The roller-coaster ride was evident when the index at a point of time during the trading session fell to 5,983.5 points, after opening on a higher note, and then peaked in late trade to reach 6,047.5 points.

Scottish & Newcastle was at the top of the index gainers, rising 5.2 per cent on speculation that the company is a target for private equity groups or rival brewer.

Similarly, speculation about consolidation in the bio-medical devices sector after U.S. orthopaedic device maker Biomet engaged Morgan Stanley to help it in a possible sale, helped Smith & Nephew gain 3.9 per cent.

The market was agog with rumours that Vodafone is planning to sell its 45 per cent holding in Verizon Wireless. The result was Vodafone shares reached 128-1/2 pence during the session, later closing 1.4 per cent higher at 123-1/2 pence. Vodafone denied the rumours saying it considers the Verizon investment as an attractive asset in a growing market.

Mining shares added to the FTSE gains as metals prices reigned at their all time highs. Copper miner Antofagasta rose 4.7 per cent, Rio Tinto 3 per cent and BHP Billiton 2.2 per cent. BHP Billiton came out with an announcement that it plans to invest up to $5 billion in its Australian mine, almost doubling copper capacity and trebling uranium capacity.

Hedge fund Man Group gained 2.6 per cent after it said the value of the fund rose 5 per cent in the last week.

The restraint on the index was mainly placed by easyJet. Other stocks that pulled down the index were Alliance & Leicester, Friends Provident and Kingfisher, all of them falling during the trading session.