FTSE breaks 6000 barrier

The City was celebrating a milestone today after the FTSE 100 Index stood above the 6000 barrier for the first time in five years.

Strong commodity prices and a burst of corporate activity which has seen historic industrial giants such as BOC, Pilkington and P&O taken over have driven a rally that one commentator likened to the stock market boom of the 1990s.

The Footsie, which rose 15.2 points to 6008.4 in the first minutes of trading, was last higher in March 2001 before the bursting of the dotcom bubble sent it spinning to a low of 3287 two years later.

The willingness of the UK's largest firms such as BP and Royal Dutch Shell to return surplus cash to shareholders while taking a disciplined approach to acquisitions has also been credited by analysts as a key reason for the rally.

Clem Chambers, chief executive of trading website ADVFN, said: "Even with all the worries in the world economy - from war in Iraq to potential plague from avian flu - the FTSE 100 has been experiencing a rally to match the height of the stock market boom in the late 1990s."

Strong results from insurer Legal & General spurred the London market into a better-than-expected start to trading today.

Traders were forecasting little change in the FTSE 100 Index, but instead the top flight jumped by more than 40 points in the opening hour of business.

Delight at the stronger-than-expected figures from Legal & General sent its share price up by more than 5%, while rivals such as Prudential and Norwich Union owner Aviva followed suit with gains of more than 3%.

And Vodafone highlighted another reason why the market is thriving when it said it would return £6 billion to shareholders, following the £8.9 billion sale of its Japanese operation to internet company Softbank.