High fives as Footsie hits new peak

By Geoff Foster for MailOnline
Updated: 08:37 EDT, 20 April 2006

TAKING its cue from Wall Street's overnight surge of 185 points, the Footsie breached 6100 before closing 45.7 points up at 6089.8 - its highest since February 2001.

The Dow's biggest one-day rise in 12 months followed broad hints from the Fed that its 21 month-long policy of higher interest rates is coming to an end. It may just squeeze out one further quarter-point rise to 5% next month.

Wall Street advanced a further 33 points early yesterday as buyers responded to strong first-quarter profit statements from Yahoo!, IBM and Texas Instruments.

Prospects for a healthy US building market should rates begin to fall helped building materials giant Wolseley race 53p ahead to 1403p. Aggregates giant Hanson jumped 31p to 760½p for the same reason but was also stimulated by revived talk of US private equity interest.

Imperial Tobacco was puffed 69p higher to 1754p by bullish noises from JP Morgan Cazenove and revived Altadis merger gossip. The broker raised its target price to £20 from £18.50p and said that the likelihood of a merger with its Spanish peer is now greater than at any time in the past.

Speculation was rife earlier this year that Imps was about to launch an agreed £7.5bn or e45-a-share cash bid for the French/Spanish tobacco group, famous for its Gauloises Blondes and Gitanes cigarette brands. The two ended merger talks in 2004 because the UK cigarette maker could not guarantee the future of thousands of French and Spanish jobs.

A deal now would cement Imps' place as the world's fourth largest tobacco company. Altadis was created in 1999 by the merger of state-owned tobacco monopolies of France and Spain. It already has links with Imps via a manufacturing agreement in the Canary Islands.

Rival Gallaher, rumoured to be on Japan Tobacco's shopping list, gained 18p at 868p. Bats added 26p at 1403p.

With Gazprom takeover chatter still doing the rounds, Centrica rose 7¾p to 291¼p. BP improved 7½p more to 704p as the price of Brent crude touched a record $73.34 a barrel. Motorists beware! Reflecting its high exposure to oil prices, JKX Oil & Gas gushed 25p to 408p.

Reports in the French press that it has attracted seven bidders for Emap France, its French operation, lifted lads magazine publisher Emap 30p to 869½p. Private equity houses PAI Partners, Alpha and 3i have apparently presented individual offers, while Apax France and Carlyle Group have joined forces to bid, as well as Candover Investments and Vestar Capital Partners.

Broker Oriel values Emap France at £400m and says Emap could become a bid target once the French side is sold. Investment bank Close Brothers, which owns top market-making firm Winterflood Securities, reflected the buoyancy of the London stockmarket with a gain of 29p at 1077½p.

Fuel cell specialist ITM Power rocketed 116½p to 335p after revealing its MK4 electrolyser has reached 3,500 hours of durability, beating a longevity milestone of 3,000 hours outlined in January. It has also found a way to replace platinum on both sides of the membrane with cheaper materials.

Evolution's Tim Freeborn upgraded to buy and expects the complete unit will produce fuel at 72p a litre, assuming off-peak power at 4p. He believes a £10m-£15m fundraising is also on the cards to finance a pilot plant.

Betex touched 84p and closed 4¾p better at 77¾p after the Asian focus online gaming company said it is to launch 22 new football lottery shops in Guangdong province in China.

A bullish trading statement helped online marketing company Themutual.net rise 5¼p to 67¾p. Trading has remained strong and turnover for the year ending end-April is likely to be significantly ahead of market expectations with profitability also strong.

• WORD is chairman Vincent Isaacs and his fellow directors at Touch Group have come up trumps and raised £700,000 at 8p, a sizeable premium to last night's bombed-out close of 55/8p. It should help revive interest in the online search directory group, which was formerly known as Ambient. There is talk too that a marketing deal with Yahoo! could be on the cards.