Dow slows down FTSE recovery

A downbeat start to trading in New York meant the London market only scraped its way to a positive close today.

The FTSE 100 Index finished the day 5.3 points higher at 4413.4, despite having peaked at 24 points above its opening mark earlier in the session.

Lower oil prices had helped the Footsie recover some of the ground lost yesterday as investors expressed relief that the price of crude had dipped from its recent record levels.

But a fall of around 70 points for the Dow Jones Industrial Average by late afternoon in London eroded early gains.

The latest quarter of a percentage point increase in interest rates to 4.75% had been widely expected and had little effect on the market.

But analysts said signs of continued economic expansion in the US raised the possibility of higher rates in the US, which could have an effect on shares.

In London, Barclays was among the top flight climbers as the UK banking giant added to the recent trend for positive updates in the banking sector.

Shares in the group rose 11.25p to 481.25p after investors cheered a record half-year and profits progress within all areas of the business.

Most other major banking stocks were in positive territory with Lloyds TSB rising 4.25p to 417p and Abbey National up 9.75p to 585p.

The easing in the oil price, coupled with yesterday’s positive update on passenger numbers, helped British Airways lift 2p to 226.75p.

And there was some easing in the pain for BSkyB after shares tumbled 19% yesterday on the back of growth fears at the pay-TV operation. Shares recovered some of the lost ground to gain 15p to 503p today.

Publishing group Reed Elsevier added 5p to 481p after reporting a 3% rise in pre-tax profits to £222m (€336.1m).

Elsewhere, water companies took the latest price review from Ofwat in their stride even though they will be allowed to increase prices by less than hoped. United Utilities rose 12.5p to 523p, while Severn Trent added 15.5p to 811.5p.

But medical equipment maker Smith & Nephew was at the top of the fallers list - off 52.5p to 481p – despite posting a 7% rise in pre-tax profits to £67m (€101.5m).

Outside the top flight, investors in dotcom boom survivor lastminute were hit by a spectacular slide in the travel and leisure company’s share price.

Worries over the outcome for the summer season sent the stock 15% lower, despite initially rising 7% on the back of strong quarterly results.

Telecoms equipment group Spirent offered some cheer to the technology sector as improved market conditions helped it return to the black.

Spirent saw its shares soar 15%, or 7.75p to 55.5p, while Logica CMG climbed 3.5p to 157.75p.

The highest Footsie climbers today were Rentokil rising 6p to 148.5p, BSkyB up 15p to to 503p, United Utilities rising 12.5p to 523p and Hays up 3p to 127.25p.

The heaviest fallers were Smith & Nephew down 52.5p to 481p, Shell off 5.75p to 399p, Xstrata down 10.5p to 753.5p and Enterprise Inns off 7p to 535p.