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FTSE erases Tuesday fall by close, telecoms surge

LONDON: London's leading shares all but wiped away the previous day's losses on Wednesday as surging telecoms and firmer bank stocks lifted the FTSE 100 from Tuesday's 12-week closing low.

The blue chip index closed 101.5 points or 1.6 percent higher at 6,375.6 points, its turnaround a sign of potentially choppy progress ahead for a market braced for interest rate rises.

On a day when gainers outpaced the losers by more than three to two, index heavyweight Vodafone Airtouch VOD.L topped the bill, its 6.1 percent rise on 212 million shares traded bringing 31 points to the party. Volumes of 1.6 billion shares traded by shortly after the 1630 GMT official market conclusion remained in line with the heavy business seen in recent months.

New York's Dow Jones industrial index surrendering early gains to trade barely firmer as London closed gave little indication of market direction.

Electrical retailer Dixons jumped nearly 10 percent from a three-month low to top the blue chip gainers, while a ratings upgrade for communications technology group Marconi MNI.L helped lift its shares more than seven percent.

Heading the opposite way was British Airways BAY.L, the FTSE 100's biggest faller, though the 7.3 percent dive in its shares accounted for a single index point.

The FTSE index of mid caps index rose 39.7 point or 0.6 percent to 6,317.6 while the FTSE Small Cap index ended 13.9 points or 0.4 percent higher at 3,194.50.

Technology stocks listed on the techMARK index mirrored the blue chip measure's performance, rising 61.3 points or 1.6 percent to 3,981.9.

DATA CALMS INTEREST RATE OUTLOOK

Figures showing UK retail sales forging ahead amid falling prices in December had earlier calmed inflation fears as had Bank of England policy meeting minutes showing 8-1 support for January's rate hike of only 25 basis points.

While soothing interest rate jitters short term, the broader picture for equities remained one of market wariness. "Our outlook going forward is probably similar to everyone else's. It's going to remain nervous while people are concerned about interest rates and looking at bond yields as well," said Andrew Lapthorne, equity analyst at Dresdner Kleinwort Benson.-Reuters