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Energy stocks lead FTSE higher, breaks 6,000 level

Published 12/23/2010, 12:01 PM
Updated 12/23/2010, 12:04 PM

* FTSE hits 6,000 for the first time in 30 months

* Energy shares helped by firmer crude

* Banks wane as Fitch Ratings downgrades Hungary

By David Brett

LONDON, Dec 23 (Reuters) - Britain's leading share index closed just shy of the 6,000 level on Thursday as energy gains outpaced slight weakness in miners and banks in wafer thin trade.

The FTSE 100 index ended 12.58 points, or 0.2 percent higher at 5,996.07 after briefly breaking through the 6,000 level near the close for the first time since June 6, 2008 and peaking at 6,000.55.

Trading volumes were anaemic at just 38 percent of the 90-day average on the final full-day session before the Christmas break.

"Where there is a will there is a way and it seems the market's will is for the FTSE above the 6,000 level by the end on 2010," Jimmy Yates, head of equities at CMC Markets, said.

Energy shares led the rise, underpinned by gains in the price of crude which held around $90 a barrel and neared a two-year high. BP was ahead 1.4 percent.

Some consumer-facing stocks enjoyed a reprieve after days of pressure from near-arctic weather across most of Britain. With temperatures beginning to rise, retailers hoped for a last-minute dash to the shops.

DIY stores group Kingfisher rose 2.2 percent and fashion retailer Next gained 1.8 percent. Tour operator TUI Travel was ahead 2.5 percent as more travellers were able to leave on Christmas breaks.

BANKS WOBBLE

Banking shares failed to join the rally, reined back by fresh uncertainty over Europe's debt situation after Fitch Ratings downgraded Hungary almost to junk debt status.

Miners were the main drag with metals prices cooling after a recent rally. Xstrata was among the worst off, down 1.1 percent.

Rio Tinto shed 1.0 percent as it offered an agreed $3.9 billion to buy African-focused coal miner Riversdale in a deal expected to be challenged by rivals.

ARM Holdings was a top blue-chip faller, down 2.4 percent after having soared 9 percent higher on Thursday on reports of a possible breakthrough move with Microsoft.

"Private investors have been pumping money into the stock market this year. If the FTSE does smash through the 6,000 barrier we might see even the most risk-averse moving their money out of savings accounts into equities," said Will Hedden, a sales trader at IG Index.

There was a flurry of positive macroeconomic data out in the United States, reinforcing views of a solid economic growth pace in the fourth quarter.

(Editing by David Cowell)

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