Tonight:
4°c
Market report: Monday 29 December
Bears in the stock market were feeling the squeeze today in a market place desperately short of stock. Traders, who had been running level positions over the festive period, were forced to jack up prices at the appearance of a few bargain hunters. Turnover levels were among the year's lowest.
The FTSE 100 index responded with a leap of 95.2 at 4311.8 on the first full day of stock-market trading since Christmas. Gains among second-liners were restricted with the FTSE 250 index limiting its rise to 61.2 at 6377.0.
The charge among blue-chips was led by commodities. The oil price rallied $2 to almost $40 a barrel overnight following a move by the United Arab Emirates to cut production and comply with oil cartel Opec's supply quotas in the face of rising tensions in the Middle East. Cairn Energy continues to savour news of another big find in India with a rise of 192p to 2083p. It was accompanied by Royal Dutch Shell, up 51p at 1704p, and BG Group, 32p better at 932p.
Imperial Energy was marked 40p higher at 1060p as the deadline for ONGC Videsh's offer of 1250p a share begins to loom. Imperial needs acceptances of 90% by the close of play tomorrow, if the deal is to go through. India's ONGC made the original offer in August, valuing Imperial at $2 billion when the price of a barrel of oil was trading in excess of $130 a barrel.
Since then the price has collapsed and attempts by ONGC to renegotiate the deal, or wriggle out of it altogether, have been thwarted. However, if the level of acceptances drops below 90% ONGC can walk away. This now seems unlikely with most of Imperial Energy's institutional shareholders falling over themselves to accept the terms.
Mining shares were also chased higher with the gains exaggerated by stock shortages. Anglo American rose 97p to 1517p, Eurasian Natural Resources, 20¾p to 325p, and Rio Tinto 81p to 1456p.
There were few signs of cheer on the high street as shopkeepers began counting the cost of the worst run-up to Christmas on record.
A growing number of retailers have been forced to call in the administrators over the festive period, including Zavvi UK and Woolworths. The children's clothing group Adams has applied for administration. Others are expected to chuck in the towel in the days ahead.
Even the big store chains have been feeling the chill wind of recession, with the likes of Marks & Spencer, down 2¾p at 210½p, and John Lewis having already started the ball rolling on their Christmas sales to clear unsold stock.
Shares in some of the best-known names came under early selling pressure. Burberry fell 7¾p to 225p, French Connection 3½p to 45p and Topps Tiles 1½p to 21½p. By contrast, the supermarket chains have enjoyed some brisk trading over the festive period. That lifted the likes of J Sainsbury, 7¼p to 322¾p, Tesco, 7.7p to 348.1p and William Morrison, 2½p to 277¾p.
