Britain's top shares surged to five-year highs this morning, tracking firmer global equity markets as worries over rising US interest rates abated, but AB Foods fell after announcing a fall in first-half profits.
Shares in the Silver Spoon sugar refiner and owner of Primark discount clothes stores fell as much as 5 per cent after it warned of a further fall in profits in the second half, citing tough conditions in its UK sugar business, bakery earnings and rising energy prices.
Oil prices raced to all-time highs yesterday on fears that Iran's escalating row with the West over its nuclear aims could cut supplies from the fourth-largest oil exporter.
By 7.20am, the FTSE 100 was 47.4 points, or 0.8 per cent, higher at 6,091.5 points, having earlier touched its highest level since February 2001, at 6,099.4.
Japanese stocks rose and US shares scored their biggest gains in a year, helped by minutes from the US Federal Reserve's March meeting which suggested that the central bank in the world's biggest economy was close to ending a two-year run of raising rates.
Oil and gas shares contributed to FTSE gains, adding about 10 points to the index, with investors betting that companies such as BP would continue to reap the rewards of high oil prices.
Financial stocks also featured strongly, with HBOS up 2.3 per cent and fund manager mvescap up 2.5 per cent, buoyed by a more benign global rate outlook and rising equity markets.
Diversified miner Xstrata led the FTSE leaderboard with a 3.1 per cent gain as copper and aluminium hit new price peaks and gold and silver traded near multi-year highs.
A ratings upgrade from UBS helped to boost Cadbury Schweppes shares by 2.9 per cent, while dealers said Imperial Tobacco shares gained 2.7 per cent with the aid of a price target hike from JP Morgan.
Agencies