FTSE Hit 21-Month High

The news that six people, including a hedge fund employee and two other City professionals, had been arrested for insider dealing during morning raids on addresses in London and the Home Counties on Monday had little effect on share prices.

Dominic Turner
shareprices.com - Tuesday, March 23, 2010

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In fact, a combination of rising commodity prices, positive trading updates and strength in US stocks lifted the mood of investors and with it the FTSE 100 index, which closed at its highest level for 21 months, up 29.09 points or 0.52% at 5,673.63, within a whisker of the psychologically important 5,700 point barrier.

Oil and gas companies were in the news for one reason or another. Edinburgh-based Cairn Energy was the best performer in the FTSE 100, rising 30.1p or 7.95% to 408.9p after upwardly revising forecasts for its prospects in India and Greenland. Global energy producer BG Group reported that it had agreed to sell its power plants in the US to Energy Capital Partners, a private equity firm, for $450 million subject to Federal and State regulatory approval. Back at home, however, the GMB trade union said that according to a poll of its members at British Gas over 80% were in favour of strike action over what it called "macho management" and changes to terms and conditions for employees. BG Group's share price fell 5p or 0.42% to 1,178.5p during the day.

BAE Systems was also under pressure, falling 8.6p or 2.2% to 380.2p, after the firm failed to secure an armoured vehicle contract worth £4 billion; the government contract was awarded to US firm General Dynamics instead. The BAE factory in Newcastle could now face closure and Bernstein Research downgraded the stock to "market perform" from "outperform" on valuation grounds.

 

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