FTSE struggles to make gains

Investors continued to hold their breath today as the battered FTSE 100 Index struggled to move away from last night’s seven-year low.

Insurance giant Legal & General set the pace early on following strong new business figures, while banks also edged ahead.

At lunchtime the index of leading shares had staged a limited fightback after falling 3.7 points by mid-morning to 3618.5 as nerves about Iraq and corporate profitability resurfaced.

And by one o’clock London’s blue chip shares stood at 3637.0 points, a 14.8-point gain for a day described as critical by market strategists.

The index had been up by 43 points after the first two hours, fuelling hopes it may finally be pulling out of its recent nosedive.

Major stocks Granada, Aviva and HBOS had given some stability after the morning’s rollercoaster ride.

The three each turned in 6% rises to get trading back on track, with Granada, up 4.75p at 66.75p, Aviva, up 23.25p at 406p and HBOS ahead 35p at 592.5p.

Yesterday’s 55 point fall meant the index had closed in negative territory for a record-breaking nine successive day.

But analysts said that despite today’s bright start investors were still likely to remain on the sidelines given uncertainty over Iraq. The arrest of terrorist suspects in Italy did nothing to calm investors’ nerves.

Others added that signs Wall Street’s Dow Jones Industrial Average will open lower later today had helped to erode the Footsie’s early advantage.

In London, Legal & General was up by more than 6% after it reported strong new business figures despite the poor stock market conditions.

A warning higher life expectancy meant it would have to boost reserves at the expense of operating profits failed to scare investors and it rose 5p to 83.5p.

Elsewhere, banks recovered some of their recent losses with Barclays up 11.25p at 360p, Lloyds TSB up 15.5p at 407p and Abbey National, ahead 1p at 441p.

But drugs giants GlaxoSmithKline weighed on the Footsie, falling 28p at 1102p on a decision to halt US trials of key asthma drug Serevent.

And oil giants BP and Shell were also lower, with BP off 5.25p at 368.75p and Shell down 2.5p at 358.5p.

Supermarket target Safeway was also falling back, down 0.75p to 315.25p, despite continued speculation over the bidding war for the group.

Rival Morrison’s, which started the bidding frenzy, was top of the table of Footsie fallers at lunchtime after shedding almost 3% to stand 5p lower at 173p.