FTSE finishes higher despite blow from US

London shares took a knock from a weak start on Wall Street today but held on to close above the key 4500 level.

The FTSE 100 Index surged 30 points in early trading but a series of disappointing trading updates meant these gains were halved at the close.

Mining stocks led by Rio Tinto propped up the Footsie and helped it end the session 16.5 points higher at 4503.2.

Investors moved in on Rio after it clinched a deal to supply iron ore to Chinese steel mills.

Its shares rose more than 3% or 45p to 1325p, while industry counterparts Xstrata and Anglo American were hard on its heels, rising 17.5p to 713.5p and 31p to 1138p respectively.

Although trading volumes improved across the market today, analysts said events next Wednesday would provide the real test of investors’ appetite for building portfolios.

This is when the US Federal Reserve will decide whether to lift interest rates on the same day as the handover of power from coalition forces to an interim government in Iraq is scheduled to take place.

The biggest risers in the Footsie today were Rio Tinto up 45p to 1325p, Alliance UniChem ahead 18p to 655.5p, Anglo American up 31p to 1138p and BHP Billiton ahead 12.5p to 472p.

The heaviest fallers were Hanson off 20.5p to 377.75p, AB Foods falling 15.5p to 627p, Bradford & Bingley off 4.75p to 270.75p and Yell Group falling 5.5p to 341p.