The FTSE 100 Index hit a new 21-month high today on recovery hopes despite plans to cut mobile phone charges putting Vodafone on the back foot.
Regulator Ofcom’s ruling sparked worries over the impact on Vodafone’s profits and the 1% or 1.95p fall to 150.1p meant the firm was the biggest casualty on a day of broad-based gains for the top flight.
But a weak dollar and positive economic news tempted investors into mining stocks, underpinning the Footsie’s 57.6 point rise to 5737.2.
Wall Street began strongly after upbeat survey data showing the best performance for US manufacturers since 2004. This follow a UK survey showing the fastest pace of growth from the sector in 16 years.
The weakness of the dollar and recovery hopes pushed up the cost of base metals such as copper and nickel, boosting commodity stocks. Xstrata was the strongest performer in the mining sector, with shares up 55p to 1304p or 4%.
In the meantime oil prices extended a two-month rally to head above 84 dollars a barrel, helping oil and gas services firm Petrofac and prospector Cairn Energy lead blue-chips higher. The duo rose 72p to 1274p and 15.2p to 432.2p respectively.
Aside from Vodafone, the few top flight stocks on the back foot were in defensive sectors as investors’ appetite for risk increased.
Drugs firms Shire and GlaxoSmithKline fell 1p to 1453p and 7.5p to 128p respectively, while Embassy maker Imperial Tobacco eased 2p to 2008p.
BSkyB, which was also the subject of a ruling by Ofcom yesterday, continued to rally after investors expressed relief that the regulator did not go further in its determination on wholesale prices for sports content. Shares were up another 8p to 610p.
In the FTSE 250, babycare retailer Mothercare was the biggest casualty, losing 14.5p to 581p or 3% after reporting its first drop in UK like-for-like sales for 19 quarters. Comparative sales slid 1.6% in the 11 weeks to March 27.
Asset management house Gartmore remained in the spotlight following Tuesday’s shock news of the suspension of one of its star fund managers which saw shares plunge 31%.
The stock continued its fightback today after yesterday’s 8% bounceback, adding a further 18.3p to 143.3p or 15%.
Spread betting firm IG Index also gained 16p to 418.2p or 3% after announcing regulatory changes which should help its US business.
Meanwhile Irish carrier Ryanair added 7% after it said a surge of bookings in the past month at higher prices had added a further 25 million euros (£22 million) to profit expectations.
