Cautious start after fraught week for Footsie

Trading on the London Stock Exchange has got off to a cautious start after the Footsie index of 100 leading stocks closed at a 27-month low last Friday.

The Footsie has made a 16.8 point gain in the first hour of trading, although this represents a slip from an earlier 46 point gain. At 9am, the index stood at 5579.8.

Last week was a rollercoaster time for investors as the Footsie plummeted by more than 355 points - wiping an estimated £82 billion from the value of the index in five days.

The losses came as traders fretted over the state of the US and Japanese economies and digested a clutch of downbeat trading statements.

But today's mood is sunnier, helped by mining company Billiton's plans to merge with Australian rival BHP.

The £20 billion deal will create the world's second largest natural resources firm. Shares in Billiton, which is listed in the Footsie 100, are up by 16% or 46½p to 336¾p.

The news is inspiring investors to seek out shares in rival mining firms, with Rio Tinto rising 30p to £12.05; and Anglo American up 42p at £41.46.

Cable operator Telewest Communications is up 2¾p rise to 122¾p after securing a key £2.25 billion debt restructuring deal with 26 global banks.

Other telecoms firms having a good morning include Cable & Wireless, which is up 5½p to 461½p; Thus, up 4½p to 60p; and Kingston Communications, up 4p to 129¼p.