London: The FTSE 100 of Britain’s leading shares ended up 0.9% on 29 March, extending earlier gains as US data, M&A activity and higher oil prices boosted stocks.
The index was initially supported in early trading by a series of upbeat results and took its lead from recovering markets on Wall Street overnight despite Federal Reserve Chairman Ben Bernanke expressing uncertainty about the US economy.
But the FTSE 100 mirrored other European markets by extending gains in mid-session after the US revised its fourth quarter GDP and reported a fall in weekly jobless claims.
The FTSE 100 ended 57.0 points, or 0.9% higher, at 6,324.2.
“All in all there just seems to be a recovery and positive tone in markets at the moment,” said Andrew Fisher, head of equity analysis at Barclays.
“We shouldn’t be naive around the risks of volatility still, particularly given the geo-political environment...not necessarily all economic questions have been answered but at the moment the markets are responding to a feeling that the economy is under control.”
US crude rose beyond $64 a barrel, after achieving its highest close for over six months, as 15 British sailors remained in Iranian custody and oil consumers weighed the risks to oil flows from the Gulf.
Heavyweight BP added 1.1%, while rival Royal Dutch Shell tacked on 0.7%.
A positive cross-over from oil prices was also good news for miners, traders said, with Lonmin up 2.2%, and Antofagasta and Anglo American both adding 2.7%.
In other news, global asset manager Schroders ended the day up 1% on the eve of its entry in the FTSE 100.
It will replace Anglo-Dutch steelmaker Corus Group, which added 0.2%, following its takeover by India’s Tata Steel .
Edinburgh-based Scottish & Newcastle, the brewer of Foster’s, Kronenbourg and Baltika beers, topped the FTSE 100 leader board, surging over 13% in heavy volume after traders cited talk of a possible bid from Heineken.
Despite its biggest one-day gain since October 1988, Scottish & Newcastle had no comment, while Heineken declined comment.
“I’ve heard this rumour before but on a strong up-day for the markets, mainly thanks to some well-received GDP data from the States, it has really caught the market’s attention and volumes have been much higher than average,” said Martin Slaney, head of spread betting at GFT Global Markets.
“Structure-wise this takeover does make some sense, and the European drinks market is particularly frothy at the moment. The major players are looking to boost their global presence in the growing market for beer.”
In other individual stocks, sugar and sweetener group Tate & Lyle climbed 5.3%, to touch a one-month high, after saying trading had continued in line with its expectations after a profit warning in late January. The stock was also bolstered after Panmure upgraded it to “hold” from “sell”.
Compass, the world’s biggest caterer, tacked on 4.9% after saying trading in the first five months of the year had been ahead of its expectations and the sale of its European vending business was progressing. The shares also benefited from a Credit Suisse upgrade.
Man Group was also firmly in the blue, up 4.1% ahead of its trading statement due on 30 March.
But on the downside, Britain’s second largest clothing retailer Next led losers after Chief Executive Simon Wolfson sold 160,000 shares resulting in bid talk, traders said.
Shares in Next had risen to an all-time high this week with traders citing continued bid talk at 2,500 pence, but closed down 4.8%.
ICAP, the world’s biggest inter-dealer broker, shed 0.8% after it said it expects annual profit to be in line with forecasts due to a rise in market volatility, from emerging markets to corporate bonds.