Footsie returns to positive territory

London’s leading shares nosed back into positive territory today, ending a run of five straight sessions in the red.

But the FTSE 100 Index fell short of staging a recovery – lifting just 16.7 points to close at 3452.7.

Taking a lead from across the Atlantic, the blue-chip index finished above its opening level after drifting lower for much of the morning.

But analysts were largely unmoved by London’s rally and warned that the same war fears which had dragged the market lower remained.

Candidates for relegation from the index, thought to include British Airways, engineering group Invensys, Rolls Royce and insurer Royal & Sun Alliance faced a nail-biting afternoon as the close of trading approached.

Whether or not they will fall into the FTSE 250 will be decided on their closing price tonight.

Invensys dived a further 10% or 1.25p to 10.75p, British Airways lost 4% or 4p at 91p and Rolls Royce eased 0.25p to 69.75p.

But Royal & Sun Alliance staged something of a rally lifting 6% or 3.5p to 62p.

Other insurance companies managed much-needed rises. Friends Provident rose 0.25p to 72.5p while Norwich Union owner Aviva added 10p to reach 366p.

The biggest gain on the Footsie was by supermarket chain William Morrison which surged almost 9% on rumours that the Office of Fair Trading is ready to pass its findings on the Safeway take-over battle to the Government. It rose 12.5p to 153.5p.

Among the banking stocks, Alliance & Leicester cheered 19p to 744.5p, HBOS improved 5p to 612.5p and Royal Bank of Scotland rose 33p to 1366p.

However, media firms remained under pressure as Reed Elsevier fell 31p to 400p, Daily Mail & General Trust slipped 5p to 429p, BSkyB eased 12.5p to 581p, and Pearson was down 22.5p at 462.5p.

Broadcaster Granada was also 4% lower – off 2p at 49p – after the Trade and Industry Secretary referred its merger with Carlton for a fuller investigation by the Competition Commission.

FTSE 250 stock Carlton fell 6%, off 4.5p to 70.25p.

Elsewhere in the second tier, steel group Corus lost almost two thirds of its value on the back of an announcement that its supervisory board had blocked plans to sell two aluminium businesses for £543 million.

Shares, which had been worth 161p in 2000, slumped 9p to 5p.

And package tour operator First Choice fell almost 3% or 2p to 67p after it warned that it was cutting capacity following a slowdown in demand prompted by war fears.

Biotech group Acambis rose 4%, or 8.5p, to 222p after revealing it had moved into profit for the first time on the back of a batch of government orders for its smallpox vaccine.

The biggest FTSE risers were William Morrison up 12.5p at 153.5p, Royal & Sun Alliance up 3.5p at 62p, National Grid Transco up 17p at 391p and Old Mutual up 3,25p at 391p.

The biggest fallers were Invensys down 1.25p at 10.75p, Reed Elsevier down 31p at 400p, ICI down 9.5p at 132p and Pearson down 22.5p at 462.5p.