Stocks: Severn swoop supports FTSE charge

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London’s leading share index continued its bull charge yesterday supported by upbeat corporate numbers and bid activity surrounding water utility Severn Trent.

The FTSE 100 index of Britain’s biggest blue chip stocks ended 54.3 points or 0.8 per cent higher at 6,686.06, posting another five-and-a-half-year closing high as investors showed few signs of tiring of the rally.

Severn Trent jumped 13.8 per cent to 2,077p after the group reported a takeover approach from a consortium led by Canada’s Borealis and the Kuwait Investment Authority.

The news boosted rival United Utilities, up 21p or 2.8 per cent at 760.5p, with traders betting on more deals in the sector. As corporate confidence recovers, investors are generally looking for merger activity to become a market driver.

David Madden, market analyst at IG, said: “It [the FTSE 100] is now fewer than 100 points from its 2007 high and with the situation still looking fairly rosy for equities we could see that level reached in a few short days.

“It is true that the skies always look brightest at the top, but, with the eurozone quiet once again and the US budget situation actually improving, it is certainly proving difficult to find a real reason for caution.”

Other top-flight risers included Babcock International after the company reported a 16 per cent rise in underlying profits. With the full-year dividend hiked by the same percentage, its shares were just behind Severn Trent at the top of the Footsie risers’ board with a gain of 74p to 1,163p.

Shares in Vodafone were flat at the close, at 193.5p, despite the promise of a £2.1 billion dividend from its 45 per cent stake in US mobile operator Verizon Wireless.

NEW YORK: Wall Street rose to fresh highs last night as investors picked up large-cap companies’ shares on the expectation that US central bank stimulus will help drive the rally further.

The Dow Jones industrial average shot up 123.57 points, or 0.82 per cent, to end at a record 15,215.25 while the Standard & Poor’s 500 Index jumped 16.57 points, or 1.01 per cent, to finish at a record 1,650.34. The Nasdaq Composite Index climbed 23.82 points, or 0.69 per cent, to close at 3,462.61.