FTSE follows Wall Street with modest gains

London shares took their cue from a positive overnight session on Wall Street to post modest gains in early trading.

The FTSE 100 Index rose 8.7 points at 4341.7 in the first hour after traders watched the Dow Jones Industrial Average close 106 points to the good at 10,129 - its highest finish for nearly 19 months.

Upbeat economic reports buoyed trading across the Atlantic, with data suggesting inflation under control and better times ahead for the beleaguered US manufacturing sector.

In London, BSkyB moved close to the top of the Footsie risers board with a 13p gain to 688.5p, despite losing its stranglehold on broadcast rights to the English Premiership.

Provident Financial added 29.5p to stand at 650p, while other financial and banking stocks were doing well.

Barclays was up 3.5p to 479.5p, Lloyds TSB strengthened 4p to 424p while HBOS cheered 2.5p at 705.5p.

Elsewhere, parcels group Business Post sent a positive message to investors with its UK Mail subsidiary clinching a deal with Royal Mail to use its sorting and delivery network. Its shares rose 17p to 507.5p.

But predictions that full-year underlying profits of Associated British Ports would be in line with market hopes failed to move shares from their opening mark of 428p.