London’s leading shares staged a late rally to close above 4700 despite record oil prices and downbeat manufacturing news.
After falling 17 points earlier in the day, the FTSE 100 Index recovered to end the session 0.8 points down at 4706.3.
The index managed to keep its head above the key support level in the face of sky-high oil prices, with the cost of a barrel of crude rising above $51 in New York for the first time ever.
Economic data in London was not helping the markets either, with official figures showing a stronger-than-expected decline in factory output between July and August.
Experts said the data provided the strongest evidence yet that manufacturers were back in the doldrums after signs of recovery earlier in the year.
Traders in New York were staying cautious, with the Dow Jones Industrial Average hovering around its opening level shortly after London’s close.
In the City, a clutch of oil-dependent stocks saw their share prices fall, including engineering firm Tomkins off 5p to 270p, Rolls-Royce falling 4.75p to 260.5p, British Airways down 2.25p to 207.5p and ICI down 2p at 220.25p.
In contrast, oil giants BP and Shell both benefited from the rise, advancing 7.5p and 3p to 556.5p and 421.25p respectively.
Satellite broadcaster BSkyB was also doing well, with broker Bear Stearns keeping its outperform rating on the stock after owner Rupert Murdoch reiterated its subscriber target of 10 million by 2010 at a conference hosted by Goldman Sachs in New York.
Drugs giant AstraZeneca found itself at the top of the Footsie fallers, off 3% or 69p to 2214p after saying approval of a key diabetes drug would be delayed by safety tests.
The group said it had agreed to extend clinical studies on Galida by another year, meaning it will not be able to file for approval until 2007.
Retailers outside the top flight were providing much of today’s corporate news, with Ted Baker up 6.5p to 424p after reporting a 26% rise in first half profits.
But Austin Reed’s shares slipped back 3.5p to 131.5p after it announced “unacceptable” half-year losses of £2.7m (€3.9m).
Telecoms retailer Carphone Warehouse added 1.25p to 152p after a positive update on trading showed the number of connections in its second quarter rose 25%.
Charter specialist Air Partner lifted nearly 4%, up 15p to 410p, after a significant increase in the popularity of business jets contributed to a 29.7% hike in pre-tax profits to £3.7m (€5.4m). The group said it had continued to recover from tough industry conditions.
Excel Airways lost a third of its market value, plunging 55p to 110p, as it emerged its two biggest shareholders were in talks that could lead to a takeover by Iceland-based Air Atlanta.
The day’s biggest risers included Man Group, up 75p to 1371p, 3i Group gaining 15.5p to 613p, Amvescap rising 6.5p to 318.5p and RioTinto adding 30p to 1550p.
Biggest fallers included AstraZeneca down 69p to 2214p, Wolseley off 28.5p to 927p, Compass Group losing 6.5p to 216.75p and Allied Unichem fading 14p to 654p.