Rocky day for London as FTSE closes up 0.5%

Wednesday 25th June 2008

The FTSE 100 closed up 0.5 per cent to 5662.70 after a rocky day for traders.

The index rose and fell during the day helped along by retailers and banks and held back by mining stocks.

Eurasian fell 5.24 per cent, United Utilities was down 4.43 per cent, Anglo American slipped 4.26 per cent, Xstrata slid 4.05 per cent and BHP Billiton was down 3.66 per cent.

On the upside the London Stock Exchange Group rose 14.14 per cent, despite losing out on a Qatari expansion deal to NYSE Euronext.

British Airways rose 8.65 per cent, while retailers benefited from positive data from the CBI on retail sales.

Next rose 6.1 per cent, while Kingfisher was up 5.69 per cent. DSG International, whose results are out tomorrow, rose 7.14 per cent.

Standard Chartered, meanwhile, rose 5.76 per cent.

Tim Hughes, head of sales trading at IG Index, said: "We are currently seeing the FTSE 100 trading near the highs of the day and after an initial early surge this morning there has been an element of marking time ahead of tonight’s US interest rate announcement."

He added positive moves started in the day with the announcement of Barclays of a £4.5bn shares issue, leading RBS and HBOS both up.

"Some traders have viewed the positive reaction as maybe a sign that finally markets are beginning to think the worst is behind the blue chip financials," Mr Hughes said.

"The past week or so has seen these hold steady and not slip to fresh multi-year lows in the face of ongoing downbeat economic news. It should prove to be an interesting sector to watch in the days to come, to see if recent gains can be built on and whether further sustainable recoveries are possible."

Attention now turns to the US and the Federal Reserve's decision on interest rates, which could provide some hints to a future rate hike.

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