London shares up, despite GDP fears

London shares were on the march for the sixth consecutive session today as oil prices continued to pull back from record highs.

The FTSE 100 Index was in positive territory all day and shook off a poor start to trading across the Atlantic to close 42.3 points higher at 4453.9.

Progress was made despite concerns about the strength of the UK economy resurfacing when the CBI downgraded its expectations for GDP growth in 2005.

Investors opted instead to focus their attention on the latest slew of corporate news and the cost of crude sliding below 43 US dollars a barrel.

The prospect of lower fuel costs placed British Airways among the session’s biggest risers – up 5.5p at 229p. Chemicals giant ICI was another beneficiary, cheering 2.5p to 220.5p.

The upbeat mood spread to a range of sectors with Prudential up 9.75p at 441.75p, and Royal Bank of Scotland ahead 29p at 1569p.

It was a mixed day for corporate news with pest control-to-hygiene firm Rentokil Initial taking top place on the Footsie fallers board after investors reacted negatively to the company’s decision not to break itself up.

Shares eased nearly 4% or 6p to 147p despite the group’s confirmation that it planned to hike the full year dividend by 10%.

Hotel operator Hilton Group was lower – down 0.25p at 259p – as it lost hold of early gains achieved following a better-than-expected 72% rise in half-year profits. Hilton said the performance of its hotels had improved, but warned it was still too early to celebrate a full recovery.

Among other developments, investors took time to warm to half-year results from specialist engineering group Tomkins.

Shares were unchanged for much of the session but later rose 5p to 259.5p as a £6.7m (€9.9m) rise in half-year profits and an optimistic outlook statement filtered through the market.

Fellow engineering company Invensys fared less well, unchanged at 15p, despite its attempts to offset a sharp rise in losses with an upbeat assessment on prospects for the second half of the year.

Elsewhere, dairy companies Robert Wiseman and Dairy Crest made progress – up 13.5p and 4p at 223.5p and 384p respectively – after being awarded milk supply contracts from Sainsbury’s. Arla Foods missed out on the long-term arrangements and saw its share price fall 4% or 2.25p to 49.75p.

There was a gain of 8%, or 5p to 69.5p, for Gowrings after the Burger King franchise operator narrowed half-year losses and said trading in July and August had been stronger.

Football club Manchester United was another on the up – ahead 5p to 257p - after qualifying for the group stages of the Champions League.

The day’s biggest risers were Legal & General, up 2.75p to 99.5p, BSkyB ahead 13.5p to 491p, ITV lifting 2.75p to 105p and Shire Pharmaceuticals adding 12p to 483.75p.

The biggest fallers were Rentokil Initial off 6p to 147p, BAE Systems down 4.25p to 199.25p, William Hill retreating 9.5p to 545.5p and British Land weakening 10.5p to 720p.