FTSE stumbles into positive territory

The FTSE 100 Index overcame a slow day for corporate news and losses by mining stocks to creep into positive territory today.

The Footsie closed just 5.9 points higher at 4728.7 as traders kept a watchful eye on movements in the oil price and the US dollar during the session.

The greenback broke through the 1.95 mark against the pound to set a new 12-year low, testing the patience of investors in blue-chip firms that have large operations in the United States.

But the afternoon saw a slight recovery in the value of the US dollar as it retreated close to its opening mark, benefiting from a slight weakening in the cost of oil.

Crude prices fell below 43 US dollars a barrel despite supply fears prompted by an attack on a US consulate in Saudi Arabia and unrest in Nigeria.

Movements in the oil price were taking place ahead of a meeting of Opec on Friday which may recommend scaling back production towards its quota of 27 million barrels a day.

Mining stocks suffered in the wake of downgrades by brokers Merrill Lynch due to the impact of the weak US dollar and rising input costs.

Rio Tinto fell 18p to 1474p, while BHP Billiton weakened 6.5p to 584p and Antofagasta dropped 9p to 1080p.

In contrast, telecoms giant mmO2 was among those keeping the Footsie in the black, rising 0.75p to 121p after investors warmed to comments from Goldman Sachs. BT also featured high on the risers board, lifting 4.75p to 206p.

Oil giants BP and Shell made headway as investors in the stock warmed to the higher cost of oil, rising 1p and 0.5p to 514p and 434.5p respectively.

Plumbing and heating specialist Wolseley made gains after a report said it was interested in buying part of DIY chain Focus Wickes. Shares climbed 13p to 890p.

Outside the top flight, office pot plants-to-washrooms group PHS rose more than 7% after vowing to continue its recent acquisitions spree as it posted a 12% rise in half-year profits. Shares lifted 5.25p to 77.75p.

Northumbrian Water also climbed 4p to 161p after higher prices in its regulated business pushed up half-year profits by 57%.

But electrical appliances group Alba – the company behind Goodmans and Dirt Devil vacuum cleaners – saw its stock fall 22.5p at 652.5p as it provided further evidence that consumers were becoming more cautious about splashing out on expensive items.

And budget airline easyJet lost 2p to 182p as data showed the number of passengers as a proportion of the number of seats available fell to 81.2% in November, from 81.5% a year earlier.

The biggest Footsie risers were Enterprise Inns up 20.5p to 702p, William Hill ahead 13p at 533p, BT Group up 4.75p to 206p and Hays ahead 2.75p to 125p.

The heaviest fallers were Reuters down 11p to 370p, Corus Group off 1.25p to 53.75p, Friends Provident down 3.25p to 155p and Legal & General off 2.25p to 107.75p.