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Market Report: Diageo leads charge back into the black.

London's top shares moved back into the black yesterday despite a negative impact from shares going ex-dividend.

Drinks giant Diageo and Scottish & Newcastle both weighed on the FTSE 100 Index after new investors lost the right to the latest dividend payments - leaving both stocks around two per cent lower.

However, the Footsie still managed to end the day 9.4 points higher at 5347.4 after solid gains from the likes of retailer Next, ahead of its first-half results today.

The failure by the index to move far from its opening point reflected the absence of major corporate news yesterday.

A trader at deal4free.com said UK retail sales figures due for release tomorrow would be closely watched as traders continue to look for indications of inflationary pressures.

The heaviest Footsie faller was Diageo, down 18p to 811p, while Scottish & Newcastle suffered a similar fate, with shares off 83/4p at 4703/4p.

Other ex-dividend stocks losing out included banking group HBOS, falling 11p to 849p and insurer Aviva down 8p to 6091/1p.

The recent easing in the oil price dragged heavyweight oil stocks down earlier in the session, but they later picked up as the cost of a barrel of crude rose back above $64 in New York. Royal Dutch Shell advanced 4p to 1820p while BP eased slightly, off half a penny to 1820p.

Next was the highest Footsie climber as investors awaited the latest update on the health of the retail sector. Shares added 38p to 1490p. Mobile phone group Vodafone also helped prop up the market with a gain of more than one per cent. The stock, which rose 21/1p to 1521/1p, had earlier benefited from a positive broker note.

Building materials group Wolseley added 13p to 1163p as investors continued to take the view that it will benefit from higher demand in the US, particularly following Hurricane Katrina.

Investors' cautious sentiment was reflected in their interest in tobacco companies, which are seen as less volatile than many other blue-chip stocks. BAT was one of the fastest risers with a 17p gain to 1172p, while Imperial Tobacco also cheered 12p to 1532p.

Elsewhere, money lender Provident Financial climbed 281/1p to 667p as it promised a review of its Yes Car Credit business, which could include it being put up for sale.

Roofing and interiors group SIG was another strong performer in the FTSE 250 Index, shares rising 28p at 693p.

Highest climbers: Next up 38p to 1490p, International Power adding 41/1p to 2371/4p, Reckitt Benckiser up 31p to 1834p and Vodafone adding 21/1p to 1521/1p.

Heaviest fallers: Diageo off 18p to 811p, Scottish & Newcastle down 83/4p to 4703/4p, Shire Pharmaceuticals losing 11p to 697p and Northern Rock off 111/1p to 8011/1p.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Geographic Code:4EUUK
Date:Sep 15, 2005
Words:467
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