Footsie ahead for fifth day running

London shares overcame disappointing economic data and profit-taking to register their fifth straight session of gains today.

The FTSE 100 Index closed 1.8 points higher at 4565.6, but saw its progress stifled by fears that blue-chip shares had become overvalued during their recent winning run.

Sentiment was also hit by official data showing the fledgling manufacturing recovery stumbling in July on the back of sharp declines in the production of beer and medicines.

Potential rises in interest rates were again at the forefront of traders’ strategy with US Federal Reserve chief Alan Greenspan due to give testimony tomorrow.

The Bank of England’s monetary policy committee is also set to discuss whether to lift the cost of borrowing in the UK from 4.75% and will announce its decision on Thursday.

Wall Street opened in positive fashion today with a 65-point gain as traders returned to their desks at the end of the Labor Day break.

In London, a clutch of companies going ex-dividend – meaning shareholders lose their eligibility for dividends – featured among the heaviest Footsie fallers. They included mining giant Anglo American, off 25p to 1249p, and pharmaceuticals group GlaxoSmithKline, falling 15p to 1137p.

William Hill was also in the red for a second day as yesterday’s update continued to disappoint investors. Shares weakened 2p to 528p.

But personnel group Hays featured among the highest climbers after saying its core recruitment division had delivered an “excellent” annual performance and confirming it will hive off its mail business later this year. Shares in the group lifted 1.5p to 125.5p

Outside the top flight, aerospace and defence group Meggitt was also upbeat - adding 2.5p to 236p – after posting record half-year profits.

Cairn Energy was in the doldrums as it blamed the weak US dollar for a 40% fall in interim profits. A fall of 24p to 1450p came as investors tipped it as a likely candidate to enter the Footsie.

Punch Taverns was upbeat, advancing 12.5p to 480p, after toasting an acceleration in second-half trading. It also defended itself against a Parliamentary probe into fairness in the pubs sector.

Financial services group Britannic added 17p to 375p after posting a 6% rise in operating profits and announcing an interim dividend.

Meanwhile, entertainment group Chorion lifted 12.5p to 228.5p after it announced that its flagship character Noddy was heading to the United States. It also reported a doubling of pre-tax profits in the first half.

Chocolate maker Thorntons saw its shares sweeten nearly 2%, up 3p to 165.5p, after it ended a five year run of declining profits and forecast a good financial year ahead.

The day’s biggest risers were Cable & Wireless, up 4.5p to 114.75p, Enterprise Inns ahead 19p at 563.5p, Royal & Sun Alliance gaining 2p to 74.5p and Hanson up 9p to 395p.

The biggest fallers were Imperial Tobacco, down 26p to 1219p, Anglo American off 25p to 1249p, Xstrata down 16p to 822.5p and BHP Billiton retreating 9.25p to 518.5p.