Interest rate rise fails to hit FTSE

Another rise in interest rates failed to make its mark today as the London market remained broadly unchanged.

After spending the session trading within a narrow range, the FTSE 100 Index closed 3.4 points lower at 4486.1.

Analysts said the hike to 4.5% had largely been expected after manufacturing output figures yesterday cleared a major hurdle to a rate rise.

The mood was echoed on Wall Street, with the Dow Jones Industrial Average only slightly up ahead of tomorrow’s market close to mark the funeral of former president Ronald Reagan.

In London, insurers were doing their best to prop up the Footsie with Legal & General up 2p at 92p, Friends Provident 3.5p stronger at 142.75p and Royal & Sun Alliance 1.5p higher at 79p.

Retailers were also enjoying a positive session despite the rate hike with Morrisons up 4.5p at 232p, Sainsbury’s ahead 2.5p at 278.25p and Argos owner GUS 5p stronger at 845p.

Marks & Spencer was still at a bid premium price, although the stock did ease 2.5p to 359p today.

On the downside, airports operator BAA was off 3p at 543.5p despite announcing that passenger numbers at both Stansted and Heathrow airports had hit new highs.

BAA rival TBI saw its stock fall a penny to 63p after it failed to translate a 15% rise in passenger numbers into higher profits.

The most spectacular movement was achieved by bus maker Henlys after its stock plummeted 95% in the wake of a restructuring plan that would leave its shares with “little or no value”.

Shares plunged 16.60p to 0.90p as Henlys added that it would delist from the stock market.

Televisions-to-telephones group Alba rose 28.5p to 804p after profits surged and the company added that it had a structure in place for significant growth overseas.

The biggest risers in the Footsie today were Rentokil up 8p to 152.5p, GKN ahead 9.25p to 244.5p, Friends Provident up 3.5p to 142.75p and Legal & General ahead 2p to 92p.

The heaviest fallers were William Hill down 18.5p to 540p, Antofagasta falling 23p to 886p, ITV down 2.5p to 110.5p and Imperial Tobacco falling 27p to 1203p.