FTSE 100 close: Balfour Beatty, ICH up
The Footsie was in the black today after an upbeat start on Wall St followed a downbeat economic forecast from the Bank of England.
The FTSE 100 index was 45.4 points up at 4,716.7, after the Dow Jones made substantial gains ahead of the US Federal Reserve's rate decision later today - the index of leading US shares was 127.1 points higher at 9,368.6.
Earlier, the Bank of England had said it expects the economy to shrink by around 5.5% at the lowest point this year before beginning its recovery.
It also said inflation could remain below the 2% target for two years, which suggested that rates will stay at rock bottom for some time.
The report came as unemployment figures showed the number of people claiming jobseeker's allowance increased by 220,000 over the quarter and by 750,000 over the year, to reach 2.43m - the highest number since 1995.
Banks benefited from the market's turnaround with their first positive session since disappointment at figures from Royal Bank of Scotland last week.
RBS was the sector's highest climber - up 2.32p at 45.15p. Lloyds Banking Group jumped 5.84p to 96.83p, although HSBC was 1.9p lighter at 653p.
Lloyds made its first disposal since the acquisition of HBOS with the agreed sale of its Insight asset management arm, while concerns over the threat of a £15bn rights issue eased.
Friends Provident, which yesterday agreed a £1.86bn takeover, gained 3p to 76p. Elsewhere among the insurers Legal & General was ahead 2.3p at 65.25p.
Shares in construction firm Balfour Beatty jumped 26.4p to 346p, the biggest gainer on the FTSE 100, after it reported a 14% jump in first-half pretax profit and upped its dividend.
The firm expects to make good progress in 2009 based on what it described as a strong first half, which was boosted by growth in its US operations.
'Another robust set of results from Balfour Beatty once again highlighting the benefits of a balanced business model serving a range of international infrastructure markets. Overall the group is on track for a strong second half,' Cazenove says in a note.
First Choice and Thomson owner TUI Travel fared less well, as strong summer trading and better than expected results for the third quarter were offset by fears over poor demand for winter holidays. Shares dropped 7.3p to 244.8p, making it the Footsie's leading faller.
Rival Thomas Cook - due to post figures tomorrow - was also on the back foot, 6p down at 230p.
InterContinental Hotels recovered some recent heavy losses with a 2.5p rise in early trading after Banc of America-Merrill Lynch and Societe General raised their price targets for the firm after its first-half results beat forecasts. But the stock finished the day 7p down at 721p.
The hotel group yesterday reported a 38% fall in first-half operating profits, but a warning that a recovery for the industry might be two years away sent its stock down 4%.
Banc of America-Merrill Lynch raised its price target to 550p from 475p, with an 'underperform' rating on the stock. Societe General raised the company's price target to 900p from 800p, with a 'buy' rating on the share.
The leading riser in the FTSE 250 was Emerald Energy, after a £532m recommended bid from Chinese state-run oil firm Sinochem. Shares rose more than 9% or 63p to 738p.
But pubs groups endured a poor session, with Greene King - off 15.8p at 436.6p the leading second tier faller. Enterprise Inns and Marston's shed 5.1p to 157p and 0.6p to 95p respectively.
Shares in Northgate rose 0.25p to 16.5p after the van hire company gets 97.5% acceptances for its rights issue.
'There's a bit of relief surrounding the level of uptake of Northgate's rights issue, which wasn't totally taken up but had a couple of big institutions behind it. The stock has been very volatile over the last few weeks and perhaps that will calm down a bit now,' say traders at Noble.
The company wants to raise around £115m from a placing and rights issue to shelter it from the downturn, which has hit the value of its vehicles.
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