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FTSE-100 index finishes with substantial gains

LONDON: The FTSE 100 finished with substantial gains on Friday amid a last-minute flurry of position-squaring ahead of the weekend.

The index closed 111.3 points or 1.8 percent higher at 6,198 point, a mere 33 points ahead of last week's close.

"People are doing some last-minute tidying up on the buy side," said one head of equity sales at a leading brokerage.

"It felt a bit panicky at the end with no one wanting to carry a new position into the weekend. But it's also felt good and steady all day," he said. But the allure of telecoms and technology stocks was overriding, with British Telecommunications Plc adding 17 points to the index and the telecoms sector contributing a total 63 points. Colt Telecom put on 10 percent with help from a bullish note from Morgan Stanley Dean Witter.

Cable & Wireless put on 8.5 percent.

E-gloss helped Centrica benefit from a second-day reaction to results and news of plans to launch telecoms and Internet services. The stock rose 15.5 percent on volume of 54 million. Warburg Dillon Read raised its target to 240 pence and reiterated a "strong buy" rating.

Positive day-after sentiment also lifted Hilton Group with a 17 percent gain by the close and 51 million shares traded, helped by hopes of e-commerce growth.

Other corporate features included strong gains for AstraZeneca amid continued positive reaction to results on Thursday and an upgrade to "buy" from Merrill, and to "top pick" from Donaldson Lufkin Jenrette.

AstraZeneca's 10 percent rise added 16 points to the FTSE. Rate-sensitive bank stocks suffered once again as investors pulled money out of "old industry" amid fears of diminishing returns, reweighting their portfolios to pour in to "new economy", high-growth stocks.

Lloyds fell 3.3 percent, wiping five points off the FTSE, and Barclays dropped two percent while Abbey National fell 1.2 percent.

But Halifax bucked the sectoral trend and rose 7.5 percent or 40-1/2 pence to 579p.

The latest economic data did nothing to quell fears about rising interest rates. However, the U.S. market ignored a bigger-than-expected jump in fourth quarter gross domestic product figures which caused a temporary wobble in the UK market, briefly cutting FTSE gains back to about 20 points. Outside the blue chips, Storehouse provided a hot spot, surging 60 percent after the struggling retailer said shortly before the market's close that it had received bid approaches which could lead to an offer for its Bhs or Mothercare businesses, or the group as a whole.

Among the small caps, Cox Insurance became the market's latest e-darling, leaping 41 percent after news it had agreed to provide services on the popular Yahoo! UK and Ireland YHOO.O portal with insure.co.uk, Cox's online brand.

The FTSE small cap index hit yet another peak -- at 3,324.9 -- as investors' appetite for minnows proved seemingly insatiable.-Reuters