US tax cuts drive FTSE 100 upwards

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The FTSE 100 Index rose 31 points to 5902

Tax cuts in the US held the FTSE 100 Index over the 5900 barrier on Monday as the London market shook off the impact of icy weather on travel and retail stocks.

Wall Street’s Dow Jones Industrial Average was up 0.1%, while the tech-laden Nasdaq was up 0.3%, after President Barack Obama signed an 858 billion US dollar (£552 billion) package on Friday renewing tax cuts for another two years.

The positive sentiment continued in London, where the FTSE 100 was 31 points higher at 5902, led by mining and utility companies and bringing it to close to the two-and-a-half year high seen earlier this month.

The rally came despite further tensions on the Korean peninsula and the weather-related impact on certain blue-chip stocks.

With passengers stranded at airports across the country, British Airways was the leading faller for a spell before settling 2.9p lower at 267.3p.

The snow and ice also meant many shoppers were unable to reach the high street on what is normally one of the busiest weekends of the year for UK retailers.

Next led the FTSE 100 Index fallers with a drop of 8p to 1977p, down 0.4%, while Marks & Spencer slipped 2.1p to 373.3p and Tesco dropped 1.3p to 432.1p. Other notable fallers included Whitbread – the owner of coffee shop chain Costa and Beefeater restaurants – which declined 13p to 1792p.

Outside the top flight, Dixons Retail Group dropped 1.3p to 23p and HMV Group, owner of book shop Waterstone’s, fell 2.6p to 28.9p. JD Sports Fashion weathered the storm as shares in the highly-rated retailer rose 37p to 897p.

Shares in investment firm Gartmore fell nearly 9% after it was revealed rival Henderson was planning a cut-price bid.

Henderson confirmed it was in talks with Gartmore, which is struggling to recover from the loss of key fund managers in recent months, about a takeover proposal at a slight discount to its December 16 closing share price of 99p. Shares were down 9.3p at 95.6p.

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