US data kick-starts FTSE

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

The City had been in subdued mood until this afternoon’s 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.

Shares initially dipped but fears of a bigger sell-off proved unfounded as the City digested new boss Luqman Arnold’s plans to refocus the group entirely on personal financial services.

That ensured Abbey found positive territory, up 28.5p at 667.5p, on a good day for banking stocks as other risers included Barclays, up 6.25p at 455p and HSBC, 13.5p stronger at 746p.

And telecoms groups also brightened with mobile phone group mmO2 up 8%, or 4p, to 52p after a broker upgraded full-year earnings targets. Also in the sector, Vodafone improved by 2.5p to 120.5p and BT Group lifted 5p to 208.75p.

But mmO2 trailed engineering group Invensys at the top of the Footsie risers’ board after the stock gained 5.75p to 58.75p. Invensys carries out much of its business in the US and would have been buoyed by today’s data release.

Broadcaster Granada also made headway following relatively upbeat comments about the advertising market in its full-year results.

Underlying pre-tax profits fell £20 million to £176 million and the stock, which also benefited from merger partner Carlton Communications’ results yesterday, gained 4p to 89p.

British Land was another Footsie company reporting results today and received a 3% lift on the London market as a result.

The stock rose 11.5p to 426.5p as the group beat expectations in the first half with strong figures for a key indicator covering the value of its assets.

On the downside, pharmaceuticals group Shire fell 13% – off 66p at 444p - after a US-based rival received early approval for a drug which could compete directly with its key hyperactivity treatment Adderall.

Outside the Footsie, water group AWG surged 13%, or 45p, to 399p after outlining plans to sell off its international arm. It also raised its dividend after producing solid half-year figures.

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.