FTSE 100 rises as confidence returns

Tuesday, 30 September 2008 12:00

The FTSE 100 closed at 4,898.28 after a volatile day of trading, higher than yesterday's close but still below the 5,000 benchmark.

The index gained almost 500 points from its lowest ebb to its highest peak as investor confidence plummeted in early trading before growing strongly by the afternoon.

News from the US this afternoon that lawmakers would salvage the bailout bill helped boost shares, after a morning which saw yet another state rescue of a bank, Dexia, and a report confirming consumer confidence remains at a low level.

Broker Icap led the risers and was up by 22.73 per cent by the end of the day, while Old Mutual rose by 12.31 per cent and Man Group was up by 10.23 per cent.

HBOS shares fell by 13.80 per cent to 122.40p by the close of the markets, on rumours Lloyds TSB was considering a renegotiation of the takeover deal.

Ryan Kneale, market analyst at City bookmaker BetsForTraders.com, said: "The European markets have held firm today after a very shaky start, following the utter pandemonium in the US last night as the initial US government bailout plan was rejected.

"Without the taxpayer's support, things are only going to go one way and that way is down. The financial world needs pro-active not re-active action, to prevent a complete meltdown of credit markets; this is no longer a problem exclusive to the US."

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