FTSE100 crosses 6,000-mark buoyed by consolidation, profit announcements |
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Sun, 19 Mar 2006 02:05
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LONDON: Increased takeover activities and strong profit announcements pushed the blue chip London stock index, FTSE100, past the 6000-point mark to a five-year high of 6,044 Friday. It fell slightly after the initial climb to stabilise at 6033.2, 0.67 per cent up on Thursday's close.
The index rose 51 points in the first hour of trading as the market welcomed strong results from Prudential and Royal & Sun Alliance as well as Legal & General. These stocks gained substantially in the trading. Among other gainers were beauty products retailer Body Shop after the announcement of a takeover by France's L'Oreal, and night club operator Luminar.
One important influencing factor on the index has been the rise of Vodafone by 1.4 per cent following its successful sale of the ailing Japanese unit to Softbank and its announcement of returning as much as 6 billion pounds to the shareholders.
Consolidation efforts and their impact virtually neutralised the fears of an economic slowdown in the country and the market responded to this with prices in several stocks going up. Three out of every four stocks were up.
While the index retained its gains through the expiry of equity-related options and futures, analysts are not sure whether the market would continue climbing. They, however, saw the hand of bidders in escalating the prices as they seem to believe the market is rather undervaluing companies at the moment.
Among the losers were retailer Kingfisher, which lost 2 per cent, clothing chain Next , Argos-owner GUS and Marks & Spencer.
The index is, however, well below its all-time high of 6,930.2 on 30 December 1999, at the peak of the dotcom boom.
There are analysts who believe the index will gain at least another 500 points as it is still not expensive.
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