Footsie off to nervous start

Jitters over tomorrow’s decision on US interest rates were weighing on the London market today.

Relief at the smooth handover of power in Iraq could not be sustained as the FTSE 100 Index reflected last night’s losses by the Dow Jones Industrial Average, which slipped 14 points.

With the release of the Nationwide’s house price survey also putting the spotlight back on the cost of borrowing in the UK, the Footsie moved 22.6 points lower to 4496.1 by mid-morning.

The aviation sector was doing its best to limit the turbulence in the market, with British Airways the second highest riser.

Shares improved 2% or 5.5p to 278p following a sharp fall in oil prices and news that international air traffic surged by almost a fifth between January and May, compared with the same period in 2003.

Outside the top flight, budget airline easyJet also soared higher, up 1.75p at 157.75p.

Oil giant BP was another blue-chip stock to make gains after upgrading its accessible reserves by 23 million barrels.

The positive restatement lifted shares by 3p to 493.5p and comes a day after rival Shell found itself under pressure from investors over its reserves crisis earlier this year. Shell shares slipped 4.75p to 411.5p today.

But mining stocks were dragging the Footsie into the red, with Anglo American the heaviest faller – down more than 2% or 16p to 1131p. Antofagasta also dipped 17.5p to 948p while Rio Tinto was off 20p to 1316p.

Elsewhere, retailers were experiencing mixed fortunes with floorings specialist Carpetright ahead 4% or 42p to 1017p after posting a 33% rise in annual profits.

But French Connection fell 3% or 14.75p to 444.75p after founder and chairman Stephen Marks moved to reduce his stake in the high street retailer.

Holiday park operator Parkdean Holidays was also in the red – off 5%, or 11.5p to 217.5p – after reporting wider half yearly losses.