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Stock market close: Day-after mood for Footsie

By Adrian Lowery
Updated: 12:06 EDT, 8 April 2009

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London shares suffered a minor blip as US markets opened, with the Dow giving up a portion of yesterday's gains on the open.

Market watcher: Will yesterday's optimism continue?

The FTSE 100 index had trod water this morning after the euphoria that followed yesterday's 'historic' G20 package, but closed 95.3 points down at 4,029.7.

The Dow Jones Industrial Average was 17.7 points down at 7,960.3 at the London close, having broken through the 8,000 barrier at one point yesterday. Payroll figures showed the US unemployment has soared to 8.5% in March, the highest since 1983, as employers slashed 663,000 jobs and cut workers' hours to the lowest on record.

Royal Bank of Scotland was one of the Footsie's leading risers as chairman Sir Philip Hampton sought to draw a line under the bank's recent troubles ahead of the company's annual meeting in Edinburgh later today.

The stock gained 8.5% or 2.4p to 30.6p as the chairman reiterated cost saving targets of £2.5bn and a commitment to begin paying dividends again 'as soon as practicable'.

It was joined on the risers board by British Airways, which climbed 9.4p to 165.1p after it announced further cost-cutting moves with 300 job losses under its voluntary redundancy scheme.

Elsewhere in the banking sector, Barclays rose 2p to 170.4p and Lloyds Banking Group cheered 2.7p to 79.2p.

On a quiet day for corporate action, B&Q owner Kingfisher climbed the leaders' board after Panmure Gordon brokers said the DIY chain was likely to benefit from the timing of a later Easter. This saw the shares gain 8.1p to 172.5p, or 3%.

• Analysis: Why the stock market rally may be brief

Traders are picking up shares in drugs giant GlaxoSmithKline, according to Richard Curr, of Blue Index, after broker Cazenove upgraded shares to outperform from in-line.

The broker says concerns over Glaxo's lack of R&D news and the possibility of it pursuing a risky acquisition are overcooked and says the company's cost-cutting programme will be sufficient to shore up earnings.

Blue Index has set a short-term price target of 1166p on Glaxo shares, which traded this morning 25.5p up at 1051.5p.

Vodafone advanced in early trading after Credit Suisse lifted its rating on the mobile phone operator to 'outperform' from 'neutral' but later fell 3.70p to 125.10p. Credit Suisse also upgraded Johnson Matthey to 'outperform' from 'neutral'. Shares in the platinum specialist surged 34p to 1193p, topping the FTSE 100 gainers' list.

The fallers board was dominated by supermarket chains, with Morrisons down 12.75p to 259.25p, Tesco off 16.1p to 332.6p and Sainsbury 12p down at 312p. Marks & Spencer also shed some of the gains made earlier this week after its better than expected trading update, standing 12.5p lighter at 316p.

In the FTSE 250, a number of stocks attracted strong buying interest as investors eyed bargains. ITV shares surged 28% or 6.25p to 28.25p, while National Express shares continued their rally this week by adding another 26.25p at 222.25p. The company removed uncertainty yesterday by announcing John Devaney as its new chairman.

Other strong gains were seen by Currys and PC World firm DSG International, which added 1.5p to 26.5p, and industrial giant GKN, up 9.75p to 93.75p.

The FTSE 100's 4.3% rise on Thursday and trading on Friday morning
>> Thursday's market report: Shares up 4%

The FTSE 100 over the past five days:

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