Winning run continues as Asian gains provide boost

The FTSE 100 Index remained in positive territory for the seventh straight session yesterday, but stocks trod water as US markets remained shut for the Labor Day holiday.

London's Footsie closed 11.04 points up at 5439.19, with markets across Europe also holding onto gains thanks to Friday's better-than-expected jobs figures in the United States.

Last week's US non-farm payrolls showed 54,000 jobs were lost over August against forecasts for more than 100,000, which sent the Footsie and Dow Jones Industrial Average in America up 1 per cent on Friday.

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"After a string of disappointing numbers, the data last week provided an element of stability and helped increase risk appetite," said Henk Potts, equity strategist at Barclays Wealth.

"When you couple that with the outlook for corporates, it looks pretty good."

The latest corporate earnings season has been relatively strong in both the United States and Europe while merger and acquisition activity in August was the most robust for the month since 1999.

Gains in Asia put the markets on the front foot again yesterday, although America's Labor Day holiday limited the potential for a further advance in London.

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In currency news, the pound fell across the board, slumping to a six-week low against the euro on ongoing fears over the UK recovery.

Sterling fell to just under 1.20 euros and dropped 0.3 per cent to 1.54 against the US dollar.

"We are seeing some relief from fears about a double-dip recession in the US helping risk sentiment and the euro," said Gareth Berry, currency strategist at UBS. "But whether this sentiment can be sustained or not is difficult to say."

With Wall Street shut and little in the way of corporate news, market attention was focused on takeover rumours surrounding Cable & Wireless Worldwide.

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Reports suggested Singapore's SingTel was lining up a buyout bid and had contacted bankers in Asia and Europe to discuss it.

However, shares in telecoms firm C&WW failed to hold on to the earlier gains as the speculation fizzled out, leaving the group 1/4p lower to close the session at 723/4p.

Shares in the Argos and Homebase parent Home Retail Group were 53/4p higher at 2271/8p, or 2.5 per cent, after broker Seymour Pierce upgraded the stock from sell to hold.

The retailer, which is due to post a trading update on Thursday, is in danger of relegation from the top flight when the latest reshuffle of the FTSE 100 Index takes place later this week.

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Other blue-chip risers included oil giant BP after the US Government said the ruptured well in the Gulf of Mexico had been secured and no longer constituted a threat. Shares were 43/4p higher at 4061/2p, a gain of more than 1 per cent.

But drugs giant GlaxoSmithKline was in the red, down 191/2p to 1249p, as it faced UK regulatory calls to withdraw its under-fire diabetes drug Avandia over ongoing fears surrounding heart risk concerns.

Heavyweight miners joined Glaxo on the Footsie fallers board, with Kazakhmys down 17p to 1268p and Eurasian Natural Resources off 91/2p to 8751/2p.

Elsewhere, five-a-side football group Goals Soccer Centres scored a 5 per cent hike after a 51/2p increase to 121p as it reported an improvement in recent sales thanks to a World Cup bounce.

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While sales dropped 3 per cent in the first half of 2010, the group has seen a 3 per cent rise since June.

The biggest Footsie risers were Home Retail Group, Tullow Oil ahead 26p to 1182p, BT Group up 3p to 1405/8p and Capital Shopping Centres which ended the day 65/8p better off at 3583/8p.

The biggest Footsie fallers of the session were GlaxoSmithKline, Icap off 63/4p to 4317/8p, Autonomy down 27p to 1748p and Smith & Nephew which finished 8p lower at 548p.

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