FTSE Close: BP and Lloyds lead rally
17.00 (close)
Fed up: Sentiment will be set by news on US economy.
The FTSE 100 Index soared past the 5600 level today as stock markets worldwide rallied ahead of Tuesday's key meeting on interest rates by the US Federal Reserve.
The FTSE 100 Index raced 94.1 points higher to 5602.5 - up 1.7% - marking its first close above 5600 since the end of April.
Wall Street's Dow Jones Industrial Average rose more than 100 points, with similar gains across Europe as the Cac 40 in France closed up 1.8% and Germany's Dax finished 1.4% higher.
Markets in the UK and US have not ruled out a Fed move to reignite flagging growth in the world's biggest economy when it reveals its interest rates decision tomorrow evening.
There is a growing expectation the Fed's rate-setting committee might relaunch moves to buy securities and mortgage bonds in an effort to further stimulate the struggling economy.
But in currency news, the pound weakened after gloomy economic indicators, with Bank of England data showing the worst August for mortgage lending in a decade.
Sterling slipped 0.5% to 1.56 US dollars and 0.7% to 1.19 euros.
One of the biggest moves in the FTSE 100 Index came from oil giant BP after the US coastguard and the company itself declared that the Gulf of Mexico well had been permanently sealed.
Shares rose 8.3p to 411.4p, but the crisis is far from over for the oil giant as it faces the financial impact of clean-up costs, fines and civil lawsuits.
Lloyds Banking Group was also in the spotlight after announcing that chief executive Eric Daniels plans to retire in a year's time. Shares lifted 2.1p to 77.4p as the news removed uncertainty surrounding the top post.
Defence giant BAE Systems was another riser as it announced a multi-million pound deal to buy part of an American intelligence business. The group's shares rose 4.6p to 333.8p, or 1%.
Supermarkets featured on the risers board after analysts at Bernstein lifted price targets across the food retail sector, citing rising food price inflation as a support.
Morrisons rose 7.5p to 306.3p, Tesco was 8.9p dearer at 437.5p and Sainsbury's added 8.7p to 394.1p.
One of the biggest rises in the FTSE 250 Index came from Brit Insurance after the sponsor of the England cricket team said on Friday evening that it had recommended a takeover proposal from private equity firms Apollo and CVC. Brit moved 40.5p ahead to 1028p.
Fellow second tier stock JD Sports Fashion joined Brit in making advances, up 13% or 97p to 823p, ahead of its interim results tomorrow, which are expected to confirm a resilient first half from the sportswear retail group.
The biggest Footsie risers were Carnival up 118p to 2489p, Rexam ahead 11.2p to 313.8p, Intertek up 65p to 1853p and Hammerson up 12.5p to 395.3p. The biggest Footsie fallers were Resolution down 4p to 243.2p, Aggreko off 23p to 1590p, TUI Travel down 1.2p to 220.5p and Cairn Energy off 1.6p to 426.8p.
15.20: Lloyds Banking Group boss Eric Daniels plans to retire from the bank in a year's time, Lloyds confirmed today.
Lloyds, which is 41% owned by the taxpayer, said it will launch a search internally and externally for his successor.
The shares were higher today, up 1.4p at 76.74p.
14.10: The FTSE 100 has plateaued since posting sharp rises this morning, but it still sits 59.15 points higher over the session at 5567.60.
12.45:
Defence giant BAE Systems is among the risers today after it announced a multi-million pound deal to buy part of an American intelligence business.
BAE shares rose 2.8p to 332p, or 1%.
Supermarkets also feature on the gainer's board after analysts at Bernstein lifted price targets across the food retail sector, citing rising food price inflation as a support.
Morrisons are 6.8p higher at 305.6p, Tesco is 8.3p dearer and 437p and Sainsbury's has added 7p to 392.4p.
Overall, the FTSE 100 is 56.63 points higher at 5565.08.
11.35: In the US later today, the Dow Jones is exected to open higher.
Spreadbetters have the Dow 47 points better off at 10,585 when markets open on Wall Street later today.
The FTSE 100 is 63.02 points higher today at 5571.47.
11.30: Yet another all-time high for gold! It is the fourth day in a row that the metal has set a new high.
Gold was fixed this morning at $1280.25 an ounce compared with $1274.00 at the previous close. Prices were helped today by growing expectations for US interest rates to remain exceptionally low when the Fed reports tomorrow.
11.10:
FTSE 100 heavyweight Vodafone has risen 1.7p, or 1%, on rumours that Vodafonem boss Vittorio Colao wants to return to a discussion surrounding the disposal of the company's 45% stake in Verizon Wireless.
On a quiet day for results, Flybe has become one of only three major European airlines to report profits throughout the recession.
Shares in rival easyJet were up 2p at 383.90p in early trading while Ryanair's were 3 cents firmer at €3.81.
11.00:
In economy news, there was gloomy property market data from the Council of Mortgage Lenders and Rightmove today.
Mortgage lending during August dived to a 10-year low for the month as activity in the housing market remained 'exceptionally' weak, the Council of Mortgage Lenders said today.
Meanwhile, property asking prices have fallen for the third month in a row, according to figures released by Rightmove today.
10.00:
The FTSE 100 pushed higher today, with BP gaining on an end at last to the Gulf of Mexico oil spill and with sentiment string ahead of the Fed meeting.
The Footsie, which last week reached its highest point since the end of April, climbed 43.9 points to 5552.4 in early trading today as the top flight recouped all of the loss seen in the previous session.
Some 87 of the 100 blue chips shares were in positive territory.
There were few fresh developments to upset sentiment as the Tokyo stock market was closed for a public holiday and traders in London saw little in the way of corporate news.
The next major milestone is likely to be the US Federal Reserve's decision on interest rates on Tuesday evening, although central bankers are not expected to announce any change in policy.
One of the biggest moves in the FTSE 100 Index came from oil giant BP after the US coastguard declared the Gulf of Mexico well had been permanently sealed.
Shares rose 6.25p to 409.3p, but the crisis is far from over for the oil giant as it faces the financial impact of clean-up costs, fines and civil lawsuits.
Top of the leaderboard was Essar Energy 12.8p, or 2.8%, better off at 465.1p.
The biggest rise in the FTSE 250 Index came from Brit Insurance after the sponsor of the England cricket team said on Friday evening that it had recommended a takeover proposal from private equity firms Apollo and CVC.
There will be updates today from Allergy Therapeutics, Silence Therapeutics, TEG Group, IS Solutions and Lighthouse Group.
Sterling edged higher, helped by Asian sovereign fund buying a subdued dollar, dealers said, although soft economic data checked gains.
Sterling was at $1.5645, up 0.15% on the day, this morning. The dollar was under pressure ahead of a Federal Reserve meeting on Tuesday where some expect it to flag the need to inject more stimulus to support a recovery.
The euro was up 0.5% at €1.1930 which came in at €1.1990 on Monday.
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