London shares close slightly ahead

London shares lost momentum today following earlier euphoria over the decision by HBOS to resist making a bid for Abbey National.

The FTSE 100 Index surrendered a 29-point gain to finish the day just 2.8 points ahead at 4548.4.

Investors praised the HBOS announcement, which removed a major hurdle in the way of a successful bid by Spanish bank Santander Central Hispano.

The news helped push HBOS shares to the top of the Footsie risers board, up 3% or 23.5p to 738p.

But with no other UK bank set to weigh in with an offer and Santander set to complete the takeover by mid-November, shares in Abbey did the opposite, topping the fallers with a 6% or 37.5p loss to 572.5p.

In London, market heavyweight Vodafone regained some of the ground lost yesterday in the wake of a negative broker note on the mobile phone sector. Its shares cheered 0.75p to 130p, although rival mmO2 weakened 2p to 92.5p.

There was a hard landing for shares in British Airways today after the airline announced it was cancelling almost 1,000 flights from Heathrow Airport over the next few months.

Claims by unions that the airline was still short of check-in staff at Heathrow weakened sentiment in BA shares, which fell 5.75p to 215.5p.

Outside the top flight, strong results from Garfunkel’s and Frankie & Benny’s helped shares in the Restaurant Group lift 4.5% or 4.25p to 98.75p.

Half-year profits rose 40% and like-for-like sales gained 3.7% but the company also said the improvement had gathered pace since then to show a 5% sales rise.

The day’s biggest risers included HBOS, up 23.5p to 738p, Amvescap ahead 8.5p to 308.5p, Intercontinental Hotels lifting 14.5p to 636p and Reuters gaining 6.25p to 345.25p.

Biggest losers were Abbey National, down 37.5p to 572.5p, Scottish & Newcastle falling 14.25p to 384p, Smith & Nephew losing 17.5p to 485.5p and Diageo shedding 20p to 687.5p.