FTSE rally too weak to make up yesterday's losses

Jitters over the closeness of the US presidential election and high oil prices hampered the London market’s progress today.

The FTSE 100 Index climbed 18.9 points higher to 4583.4 as investors picked up discounted stocks, but the rise was not enough to make up yesterday’s heavy losses.

Although the cost of a barrel of crude has retreated from recent record highs, it still stood close to the $55 mark, contributing to the reluctance to invest.

Analysts at Barclays Stockbrokers said concerns that a repeat of the 2000 race for the White House was on the cards also affected the mood.

Barclays said: “This is the worst possibility for financial markets, which are not choosy between Mr Bush and Mr Kerry as long as there is a clear winner.”

The Dow Jones Industrial Average was on upbeat form, standing more than 50 points higher by closing time in London.

BP was among the heaviest fallers in London as investors fretted that the oil giant will not buy back as many shares next year as in 2004, opting instead to spend money on infrastructure.

Profits of $3.94bn (£2.14bn/€3.1bn) also failed to impress as BP shares slipped 6.5p to 531p. Shell was down 2.5p at 412p, but Cairn Energy lifted 16p to 1480p.

Cigarettes group BAT was also off colour despite announcing a 20% rise in profits and saying a business-transforming deal in the United States had shown early promise. Shares were a penny lower at 817p.

Those lifting the mood included advertising group WPP after it said quarterly revenues grew at the fastest rate since 2001. Shares rose 16p to 539.5p despite a cautious note on prospects for next year.

Media stocks were also in favour, with ITV topping the risers – up 3.25p to 104.5p – and Reuters advancing 7.5p to 370p.

Insurer Friends Provident was up 0.25p at 135.75p after announcing plans to buy Luxembourg-based life assurer Lombard for £183m (€263.4m).

Elsewhere, housebuilders were in the money after Westbury unveiled a 22% rise in half-year profits to £58m (€83.5m) and said it remained convinced of the sustainability of the UK housing market in the longer term.

Westbury shares cheered 14p to 383p, while Barratt Developments rose 14p to 513.5p, Bovis Homes leapt 4% or 20p to 532.5p, Redrow climbed 10p to 342p, Persimmon gained 16p to 623p and Taylor Woodrow advanced 4.25p to 240.5p.

But shares in lastminute.com shed nearly 1% or 0.75p to 104.25p after chairman Allan Leighton said he was stepping down.

Shares in logistics group Exel added 12p to 702.5p after it hailed business wins with some of the high street’s biggest names and voiced confidence about meeting mid-term growth targets.

The biggest Footsie risers were ITV up 3.25p to 104.5p, WPP rising 16p to 539.5p, Anglo American up 36p to 1232p and British Land rising 19p to 743p.

The heaviest fallers were William Hill down 13p to 480.5p, Smith & Nephew off 10p to 454.5p, BG down 6.75p to 354p and BP off 6.5p to 531p.