Markets: FTSE 100 up on US data

London's top share index closed up 38 points at 5351, with Pearson (PSON) leading the way after its cheered investors with strong first-half profits and a positive outlook. Barclays (BARC) was also on fine form amid something of a relief rally following the results of the European stress tests.

Yusuf Heusen, senior sales trader at IG Index, said: "With shares in the USA making a strong start and the Dow Jones out to its best levels for a month it should make for an interesting tug of war in markets over the next few days.

"We had got used to rallies running out of strength in the UK when the FTSE 100 moves above the 5300 mark. Traders will be watching the news flow closely in the next few days to see if it can help underpin this latest bout of enthusiasm."

The Dow Jones leapt 68 to 10492, while the Nasdaq jumped 17 to 2286 and the S&P 500 rose right to 1111.

The online delivery firm raised £215 million, joining the likes of investment vehicle Vallar, which raised £687 million and GCP Infrastructure Investments which raised £40 million.

So far this year, there have been a total of 45 IPOs on the Exchange's markets, raising a total of over £5.5 billion.

London's leading share index was up 21 points at 5333, with Pearson (PSON) and Tullow Oil (TLW) remaining the two battling it for top spot on the winners' board as both climbed over 4%.

While banks and BP (BP-) were also on the front foot, software firm ARM Holdings (ARM) found itself bottom of the pile, as Randgold Resources (RRS) led a weak mining sector with losses of almost 3%.

New-home sales data boosted investors' confidence, with sales leaping 23.6% in June - recovering from a record low.

This helped the Dow Jones jump 45 to 10470, the Nasdaq rise 10 to 2279 and the S&P 500 climb six to 1109.

The FTSE 250-listed group said the closure of its UK operations will save it between £4 million and £7 million per year from the start of 2011 onwards.

It added that its telephone betting system has registered a loss of £1.8 million in 2009 and was expected to make a small operating loss in the first half of 2010, as it battled with competition from betting exchanges and offshore telebetting operators who benefit from greater tax advantages.

Its shares were down marginally at 173.15p.

The Financial Policy Committee will be initially set up on an interim basis as legislation is looked at by parliament, according to the coalition government's Financial Regulation consultation document.

Its membership will include the governor of the Bank and the chairman and chief executive of the Financial Services Authority.

The committee will have "ultimate authority to identify imbalances, risks and vulnerabilities in the financial system and take decisive action to mitigate these in order to protect the wider economy", the document said.

Plans to create such a body and give the Bank powers over financial regulation were announced by the Conservative Party before the May election. They were later confirmed by Chancellor George Osborne in June.

13:42 - Technology developer Pace (PIC) has is forking out £308 million for US broadband group 2Wire.

The FTSE 250-listed group said the deal would add to its already strong position in the US, by offering it the chance to "address a full range of US operator requirements".

It said it intends to finance the acquisition from existing cash resources, together with new bank facilities.

News of the deal came as Pace reported a 21% jump in revenue to £635.2 million in the first six months of the year and said pre-tax profits shot up 39% over the same period.

Shares in the group shot up more than 11% to 209.3p.

13:13 - The FTSE 100 (UKX) was at a standstill on Monday, as banking strength offset weak miners and real estate firms.

London's leading share index was up a solitary point at 5313, with Pearson (PSON) top of the pile after it raised its full-year outlook on the back of its first-half profit rise.

Tullow Oil (TLW) remained on the front foot too, with Barclays (BARC) and Lloyds Banking Group (LLOY) leading the banking charge.

Meanwhile, Fresnillo (FRES) found itself at the foot of the table, edging out GlaxoSmithKline (GSK) as the day's biggest faller so far.

12:51 - Oil prices slipped on Monday as Tropical Storm Bonnie subsided.

The commodity lost 0.56 cents to $78.42 a barrel, after rallying close to $80 on Friday amid fears that it could hit oil operations in the US Gulf Coast.

Meanwhile, flat European equity markets did little to help its cause.

12:25 - House prices in England sidled lower in July as the number of potential buyers diminished.

The average cost of a home dipped 0.1% to £158,700 - the first time it has fallen in 15 months, according to data by property group Hometrack.

While the number of new buyers registering with estate agents fell, the number of new properties to come onto the market jumped 3.6%.

Hometrack predicted further softening in the second half of the year amid economic uncertainty over the impact of recently announced cuts in government spending.

The FTSE 100-listed group said it would deliver "another year of good performance", which underpins its targeted 8% dividend growth policy to 2012.

The UK-based utility added that its recent £3.2 billion rights issue will enable it to fund a significant increase in UK capital investment this year.

Shares in the company slipped marginally to 501.75p.

The FTSE 250-listed group plummeted by 79% as it admitted it has an "urgent requirement for additional funds to meet the current and ongoing needs of the business".

Net debt is reckoned to be significantly in excess of the previously touted £120 million at the end of August, it said, and has therefore entered into discussions with lenders to secure additional funding.

Today's share price of 21.25p is a far cry from the 300p it was trading at just two months ago before changes in the social housing division forced it to lower its earnings expectations.

Despite banks being lifted by the stress test results, London's leading share index fell six points to 5307, with GlaxoSmithKline (GSK) bottom of the pack.

Also in the doldrums were fellow drugs group AstraZeneca (AZN), as well as BG Group (BG-) and Experian (EXPN).

On the other side of the coin, Tullow Oil (TLW) was sitting atop the winners' board after it struck black gold offshore Ghana.

The AIM-listed group said the exploration well located offshore the Faroe Islands, will target the potentially oil bearing Eocene and Palaeocene sandstone.

The AIM-listed group, along with fellow UK-listed Dana Petroleum (DNX) which owns a 25% interest in the prospect, said the well should take around 75 days to drill.

For more, read: Faroe kicks off drilling campaign.

Sales rose to £2.1 billion from £1.9 billion in the same period last year.

Reckitt, which has agreed to buy durex-maker SSL International (SSL) for £2.54 billion, said if its offer was successful it hoped to close the deal in the fourth quarter of 2010.

The maker of Cillit Bang and Nurofen painkillers saw its half-year dividend rise 16% to 50p.

It believes growth will remain below 1% this year before gradually speeding up "to give the UK a high-quality recovery based on trade and investment".

It also forecasts that inflation will remain above the government's 2% target for the next 18 months due to higher energy prices and rises in VAT before dropping well below as "spare capacity bears down on pricing decisions and wage bargaining".

The news came amid speculation that the FTSE 100 giant would report liabilities connected to the spill have reached $30 billion (£20 billion) when it unveils its second-quarter figures.

Hayward was yesterday locked in negotiations with board members over his exit plan, with a £1 million "golden goodbye" payoff and a £10.8 million pension pot mooted. He is also expected to leave on regular contractual terms.

For the full story on Hayward and the rising costs, read: Hayward set to leave as BP's costs rise.

London's leading share index edged up seven points to 5319, with Tullow Oil (TLW) top of the risers' board after striking oil in Ghana.

Joel Kruger, currency strategist at Daily FX, said: "The general consensus and feedback in the two weeks leading up to the stress test results was quite positive, so it wasn't much of a surprise to see the results come out on the upbeat side.

"However, the major concern heading into the tests and now after the tests is that the tests were way too lax and have helped very little, if at all, to instill a higher degree of confidence in the European banking system."

Asian markets were breathing a sigh of relief after all but seven of the 91 European banks stress tested recently were deemed sufficiently capitalised to withstand another debt crisis.

Japan's Nikkei piled on 81 points to stand at 9512 with financial stocks leading the way. Investors also got a boost from a report showing that exports from the world's second largest economy rose for the seventh consecutive month in June.

Oil giant Tullow (TLW) saw its shares shoot up more than 5% after making a "very substantial light oil discovery" in Ghana.

The FTSE 100 group encountered a gross vertical reservoir interval of 154 metres containing 53 metres of net oil pay in two zones of high quality stacked reservoir sandstones at the Owo-1 exploration well in the Deepwater Tano licence in offshore Ghana.

Exploration director Angus McCoss said: "Given this success, we are immediately drilling an appraisal sidetrack to further assess the size of this find. Accelerated appraisal drilling will now focus on maturing the resources in both Owo and the adjacent Tweneboa accumulation towards commercialisation."

Publisher Pearson (PSON) has raised its full-year outlook after seeing first-half profits rise to £203 million from £111 million.

The group, which owns The Financial Times, saw sales lift to £2.34 billion from £2.15 billion. However, it also warned that market conditions remain uncertain with growth expected to slow in the second half of the year amid tougher comparables.

The interim dividend jumped 7% to 13p a share.

Its shares climbed almost 3% to 1,001p.