FTSE breaks through 6,000 barrier

THE Footsie yesterday broke through the 6,000 mark for the first time in more than a month as its run of gains continued despite falls in the banking sector.

London’s benchmark FTSE 100 index closed up 27.78 points at 6,017.54 – up just under 0.5 per cent – as it continued to build on its recent rally, which started when Greece agreed tough austerity measures to cut debts.

However, the blue-chip market’s gains were moderated yesterday after ratings agency Standard & Poor’s warned that French banks’ plans to roll-over Greek debt could be treated as a default. This caused shares to fall in some of UK-based lenders.

The pound was up against the euro, at €1.11, after the single currency slid following S&P’s warning. Sterling was flat against the dollar at $1.61. US markets were closed for the country’s independence day holiday.

David Jones, chief market strategist at IG Index, said: “Volumes have been low in London trading but this hasn’t stopped the FTSE 100 index hitting its best levels since mid-May.”

The banking sector was hit by the S&P’s warning over Greece, with Lloyds Banking Group down 0.9p to 49.9p, Royal Bank of Scotland off 0.6p at 39.1p, and Barclays 2.9p lower at 262.7p.

Food and drink companies were among the biggest risers after talk of mergers and acquisitions boosted the sector. This included speculation that Nestle will bid for a Chinese candy maker, Hsu Fu Chi International.

Shares in Grolsch-brewer SAB Miller rose 24.5p to 2,290p on speculation that it could make an increased bid for Foster’s.

Other risers included Marmite-maker Unilever, up 25p to 2,037p, and Johnnie Walker-distiller Diageo ahead 15p at 1,297p.

In the FTSE 250 index, Mr Kipling-maker Premier Foods rebounded following last week’s profits warning. Shares were up 1.6p to 18.7p.

Aberdeen-based oil and gas explorer Xcite Energy recovered some of its recent losses – closing up 17.5 per cent or 25.75p at 173p – following last week’s draw down of additional funding from investor Yorkville.

But Edinburgh-based explorer Cairn Energy headed in the opposite direction, down 13.8p or 3.3 per cent at 404.7p as investors continued to digest the possibility of a lower selling price for its stake in Cairn India, which is being sold to miner Vedanta. Cairn was the biggest faller in the FTSE 100 index.

Aggreko, the Glasgow-based temporary power provider, was ahead 36p at 1,980p after Citigroup lifted its target price and profits forecasts for the firm. Citi upgraded the target after a strong performance from the international power division.

Energy services giant Wood Group was on the rise at 694p, up almost 5 per cent, despite new shares being admitted to trading as part of the Aberdeen-based firm’s return of £1.05 billion to shareholders after it sold its well support division to General Electric for £1.75bn.

Weir Group, the Glasgow-based engineering heavyweight, also continued its recent run of good form, up a further 2 per cent or 44p to close at 2,185p.

Shares in 3D Diagnostic Imaging slumped 11.8 per cent – down 0.25p at 1.18p – despite the Dundee-based dental technology firm unveiling software for its CarieScan device, which is used to detect cavities in teeth.