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Yesterday's trading: FTSE still rising from the ashes

By Geoff Foster for MailOnline
Updated: 03:48 EDT, 21 July 2009

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Freddie Flintoff's Ashes heroics at Lords provided an entertaining sideshow for dealers as the fabulous Footsie advanced for the sixth consecutive trading session.

Geoff Foster: 'Forty-five hundred here we come,' was the shout yesterday.

'Forty-five hundred here we come,' was the shout as it followed last week's impressive gain of 6% with a further leap of 54.87 points to 4443.62.

Wall Street got in the party mood with a rise of 104.21 points to 8848.15 after New York traders heaved a sigh of relief on hearing that money lender CIT had been saved from the knacker's yard.

They were also hopeful that Federal Reserve chairman Ben Bernanke will today say that the world's biggest economy is over the worst when he begins a two-day testimony to Congress.

UK fund managers appear oblivious to the growing swine flu threat. They shrugged off a dire warning from the Ernst & Young's Item Club that a widespread pandemic could drag Britain's economy into the worst economic slump since the 1920s.

It could cause the economy to contract by 7.5% this year and derail a widely predicted recovery next year and could also tip the economy into deflation.

Swine flu concerns did affect Smith & Nephew. The replacement hip group limped 10¾p lower to 440¾p after Cazenove downgraded to 'in-line' from 'outperform'.

The broker fears that a protracted pandemic could cause hospitals to free-up bed space and managing staff, potentially leading to the cancellation of elective procedures.

With UK health officials also now advising people not to travel and stay away from crowded places, British Airways lost 3.2p to 132.42p. A number of airlines and airports are either turning away or putting into quarantine individuals who they believe may be carrying the virus.

GlaxoSmithKline, which analysts believe could bank £1.3bn in 2010 selling vaccines against the swine flu virus, rose 29p to 1141½p ahead of tomorrow's second-quarter figures.

GSK and its partner, Human Genome Sciences, yesterday announced positive phase III data for drug candidate Benlysta in development for the treatment of Lupus, a chronic inflammatory disease that can affect various parts of the body.

But Panmure Gordon believes Lupuzor, a treatment being developed by Immupharma (4p better at 96½p), is a better product. It says Immupharma has completed two phase II trials for Lupuzor and in both it would appear superior to the data achieved with Benlysta.

Excited by the Friends Provident and Resolution takeover situation and buoyed by the recent strong recovery in the stock market, Legal & General rose 4.3p to 61.38p and Prudential added 21½p to 409½p.

Oil services group Amec advanced 29p to 694p following its £52m acquisition of leading Australian engineering and project development company GRD.

News that the amount lent by members of the Council of Mortgage Lenders reached £12.3bn in June, up from £10.5bn in May, raised hopes in some quarters that the increased lending will help accelerate a recovery in the UK housing market.

Housebuilders erected good gains with Taylor Wimpey leading the charge in the FTSE 250 with a gain of 2¾p at 36½p. Barratt Developments added 9¾p at 165½p and Bovis Homes 22¼p to 439¼p, following upbeat comments from UBS. Bellway jumped 36p to 696½p.

A pleasing trading update helped Judges Scientific, which specialises in the design, manufacture and sale of scientific instruments, buoy investors. The group traded strongly in the first half and the order intake showed a healthy increase over last year's figure. The stock closed flat at 92p.

Oil and gas services group Plexus gushed 4p to 46½p after signing a £600,000 contract with Gaz de France SUEZ for its proprietary POS-GRIP wellhead technology for exploration activities in the Egyptian region of the Mediterranean Sea.

Irish stockbroker Goodbody says the many upsets at the weekend's British Open golf championship must have helped its bookie Paddy Power, €0.1 dearer at €49, have it off. Not only did heavily-backed favourite Tiger Woods miss the cut but the Claret Jug was won by 150-1 shot Stewart Cink.

Netplay TV firmed ½p to 27¼p after announcing a TV distribution deal with STV Group and the launch of Scotland's first live interactive TV casino on a national terrestrial broadcast channel.

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