By Sarah Turner
British shares rose for the fourth day in a row on Friday, with
investors notably buying up oil majors, as hopes for a recovery in
the global economy continued to grow.
The U.K. FTSE 100 index rose 1.4%, or 67.91 points, to 4,824.49,
a level not seen since last October.
Gains were modest in early trading but picked up through the
session as investors eyed data that fed into hopes for a continued
improvement in the global economic backdrop.
A closely watched gauge of economic activity across the
16-nation euro-zone private sector posted a record jump on Friday,
as purchasing managers signaled that the region's battered economy
stabilized in August.
Of companies advancing notably in London, airline British
Airways climbed 6.6% and oil major Royal Dutch Shell saw its shares
advance 2.2%.
BP shares rose 1.4% as light sweet crude-oil futures climbed
$1.09 to $74.00 a barrel.
In a stronger financial sector, insurers Aviva , up 3.9%, and
Legal & General , up 4.1%, both advanced.
"We believe Legal & General has been overlooked: in our
view, its gearing alone should be enough to see it recover from
14-year lows if the market continues to rise," said Goldman Sachs
analysts in a note on the sector.
"L&G is on the Conviction Buy List. As we return to more
normal investment conditions, we anticipate far less investment
variances. This, we believe, will enable the market to focus on
L&G's cash-generating ability," the broker added.
Birmingham City gets takeover bid
Outside the top index, shares of soccer club owner Birmingham
City soared 40.3% to 91 pence per share.
An investment vehicle run by Hong Kong businessman Carson Yeung
on Friday made a bid of 81.5 million pounds ($134 million) to buy
the firm.
Grandtop made an offer of 100 pence per share in cash.
Additionally, property Web site operator Rightmove saw its
shares jump 19.3%.
First-half profit rose to 13 million pounds, from 12.6 million
pounds at the same point a year ago, helped by cost cutting. It
said that it's confident of exceeding market expectations for
2009.
"Revenue is in line, but good cost control means a significant
beat at the earnings per share level," said analysts at Investec
Securities.
Shares of BBA Aviation climbed 2.9% after it was upgraded to
hold from sell by Citigroup on Friday.
The broker said that, after robust trading in the first-half of
2009 and strong cash generation, it believes the company's
financial position looks more secure and trading is near a
trough.