FTSE Close: BA, easyJet up; J Sainsbury down

By Adrian Lowery
Updated: 12:42 EDT, 6 October 2010

17.00 (close)

The FTSE 100 Index moved closer to the 5700 mark today as investors shook off disappointing jobs data in America.

London's Footsie is trading at levels not seen since late April - up 45.6 points to 5681.4 - on renewed hopes over the global recovery, despite news of the first cut in US private sector jobs for seven months in September.

The Dow Jones Industrial Average in America also overcame a weak opening as the autumn stock market rally continues apace.

Sentiment was lifted as investors expected the US jobs report would add to prospects for more action to further stimulate the economy from the Federal Reserve.

The Bank of Japan unexpectedly cut interest rates yesterday, supporting the view that other governments will act further to bolster an uncertain economic recovery.

UK policymakers decide on interest rates tomorrow amid mounting pressure to take action to help the recovery, although they are not expected to change rates or extend Quantitative Easing this month.

The pound weakened ahead of tomorrow's rates decision, down to 1.14 euros and just holding firm at $1.59.

The top flight benefited from another decent session for mining stocks after the improved recovery hopes lifted base metal prices and crude oil increased to around 83 US dollars a barrel.

Anglo American rose 110.5p to 2752p, Kazakhmys advanced 56p to 1483p and Lonmin was up 4% or 67p at 1790p.

There was also a 5% gain for British Airways as it launched its transatlantic tie-up with Iberia and American Airlines. Shares were up 11.5p to 266.1p, which added to the 6% rise seen yesterday after it posted better-than-expected traffic figures.

BA's rally was given further momentum by low-cost rival easyJet, which raised its profits forecast and said the cost of disruption to European airspace caused by the Iceland volcano was likely to be less than expected.

EasyJet shares topped the FTSE 250 Index risers board with a gain of 12%, or 46.4p to 433.3p.

Elsewhere in the second tier, shares in Dunelm soared after the homewares chain continued to defy forecasts with a surprise rise in like-for-like sales.

The firm, which has 106 stores under the Dunelm Mill name, reported growth of 2.1%, beating City expectations that its sales could fall by as much as 5%. Shares were up 5% or 22.4p at 427.6p.

Back in the top flight, shares in supermarket chain Sainsbury's fell, despite better-than-expected sales figures for the second quarter.

The group, which was down 2.5p at 387.1p, posted like-for-like sales growth of 2.9%, helped by the success of its non-food offering, but was cautious over its outlook in the face of a "challenging" consumer environment.

Among other major Footsie losers was software group Autonomy Corporation, after it warned it will miss market expectations for its full-year revenue by around 3%, triggering a 16% or 301p drop in shares to 1551p.

The biggest Footsie risers were Man Group ahead 10.6p to 237.7p, Essar Energy up 22.1p to 503.5p, British Airways up 11.5p to 266.1p and Anglo American up 110.5p to 1752p.

The biggest Footsie fallers were Autonomy Corporation down 301p to 1551p, Admiral Group off 74p to 1590p, Arm Holdings down 10.7p to 389.3p and Centrica off 5.2p to 321.8p.

12.30

Miners area leading gains for the Footsie, which is 31.1 points up at 5,666.9. Antofagasta is up 4% or 53p at 1322p, Xstrata 44.5p to 1284.5p and Kazakhmys has now advanced 51p to 1478p.

Shares in Dunelm soared after the homewares chain continued to defy forecasts with a surprise rise in like-for-like sales. The firm, which has 106 stores under the Dunelm Mill name, reported growth of 2.1%, beating City expectations that its sales could fall by as much as 5%. Shares were up 7% or 26.3p at 431.5p.

Among the major Footsie losers were software group Autonomy Corporation, after it warned it will miss market expectations for its full-year revenue by around 3%, triggering a 16% or 294p drop in shares to 1558p.

TUI Travel also failed to hold on to gains triggered by yesterday's strong summer trading update, after investment bank UBS downgraded the firm from buy to neutral. Shares slipped 5.6p to 220.3p.

09.30

Healthy figures from the US services sector boosted Wall Strete last night and helped London's top shares to more gains today.

With the Dow Jones Industrial Average closing nearly 2% higher last night, the FTSE 100 index was able to follow up yesterday's strong session with a further rise of 46 points to 5,681.7 - its best level since late April.

The Bank of Japan unexpectedly cut interest rates on Tuesday, supporting a view that other governments will act further to bolster an uncertain economic recovery, and that boosted world commodity prices.

'Central banks are moving towards additional stimulus in the United States and Japan, but as important, growth data has been good relative to expectations and there's been an improving trend,' said Ronan Carr, European equity strategist at Morgan Stanley.

Mining stocks benefited from rising metal prices: gold hit a record high yesterday and copper rose to its highest since July 2008. Kazakhmys was the biggest riser, 59p up at 1,486p.

There was also a gain of 3% for British Airways, which added to the 6% rise seen yesterday after it posted better-than-expected traffic figures.

BA's rally was given further momentum by low-cost rival easyJet, which raised its profits forecast and said the cost of disruption to European airspace caused by the Iceland volcano was likely to be less than expected.

EasyJet shares topped the FTSE 250 Index risers' board with a gain of 8%, or 32.5p to 419.4p.

Back in the top flight, shares in supermarket chain J Sainsbury were flat despite better-than-expected sales figures for the second quarter. The group, which was down 3.6p at 386.2p, posted like-for-like sales growth of 2.9%, helped by the success of its non-food offering.