Oils Fuel Footsie Surge to a Two-Month Peak; Market Report

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Byline: MALCOLM WITHERS

MILITARY success in Iraq boosted London shares to a two-month high as the benchmark FTSE 100 index surged as much as 116 points. Equities in New York opened higher after key oil installations and ports fell into coalition hands, giving extra meaning to the transatlantic alliance.

Since the end of last week, the London market has soared 18%. Oils, financials and pharmaceuticals led the charge of the FTSE 100 as safe-haven gilts were ignored in favour of equities pushing the blue-chip index up 69.5 points at 3835.2 as 1.6 billion shares changed hands.

The double- witching hour led to relatively modest volatility in Footsie futures contracts as the index traded within a 20-point range. When it ended, the Footsie immediately headed upwards, partly on optimism that troops may reach Baghdad within four days.

The smell of burning oil in the Middle East as oil wells were set alight could almost be detected in the City as shares in the sector took off. Shell added 9p to 390p while BP's massive share buyback continued as it purchased for cancellation another 10 million shares at between 408p and 414p. The buyback looked wise after BP rose 111/2p to 4283/4p.

Drinks giant Diageo was 11/2p weaker at 6681/2p after the launch of a US inquiry which might mean it has to reformulate the contents of Smirnoff Ice to allow it to continue to be sold in convenience stores there.

Trade Secretary Patricia Hewitt bowed to pressure from 6000 High Street pharmacists and expressed doubts about deregulation as proposed by the Office of Fair Trading.

Pharmacy chain Boots liked the prescription and rose 121/2p to 5731/2p while Alliance Unichem gained 193/4p to 435p.

But the main impact was on the bid-happy supermarkets sector. Many of them were hoping to get their hands on pharmacy YOU CAN BUY AND SELL SHARES ONLINE FOR u15 AT www.thisismoney.co.uk This Is Money Share Dealing Ltd is an Introducer Appointed Representative of The Share Centre Ltd. …

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