Improved US data injects life into London trading

LONDON shares finally kicked into life yesterday as better-than-expected economic data in the United States rubbed off on investors.

The City had been in subdued mood until the afternoon data provided traders with the inspiration they had lacked earlier in the week.

Buoyed by improved purchasing managers’ figures, the Dow Jones Industrial Average added 200 points by the time of London’s close and in turn helped the Footsie finish 73.2 points ahead at 4144.2.

Analysts said the developments across the Atlantic had provided more of an impetus than Chancellor Gordon Brown’s pre-Budget report, which was viewed as being in line with expectations. However, oil stocks built on earlier gains after Mr Brown announced the abolition of royalty taxes on companies operating in the North Sea. The news helped BP close 4%, or 17p, ahead at 417p, while Shell ended 12.5p stronger at 413.5p.

Elsewhere in the Footsie, troubled mortgage bank Abbey National managed to achieve a rise of 4% despite warning investors to expect the company’s first loss as a public company and a lower full-year dividend.

The biggest Footsie risers were Invensys up 5.75p at 58.75p, mmO2 ahead 4p at 52p, Corus Group up 2p at 32p, WPP Group ahead 30p at 505p.

The biggest fallers were Shire Pharmaceuticals down 66p at 444p, Capita Group off 16p at 247p, Schroders down 20p at 575p and Rexam off 13p at 402p.