FTSE recovers early losses to rise above 4700

London shares recovered to end the day above 4700 after healthcare stocks led Wall Street higher.

After slipping more than 33 points in earlier trading, the FTSE 100 Index made up some of its losses to end the session 24.8 points down at 4703.9.

US stocks rose after drugs group Merck forecast a smaller 2005 earnings decline than some analysts expected.

Engineering giant General Electric also gave US shares a boost after broker Lehman Brothers raised its opinion on the group.

The Dow Jones responded positively to the upbeat corporate news, lifting 42 points to 10482 shortly after the close of trading in London.

There were positive economic pointers at home as a leading academic said the forecast for the housing market next year was one of “bright intervals and scattered showers” rather than “storm clouds”.

Open University Business School economist Martin Upton said doom and gloom surrounding property prices was overdone.

But it was a downbeat picture on the corporate front, with major mining, oil and aerospace stocks in the red.

Miners were among the heaviest fallers as they reeled from the second broker downgrade in as many days.

Xstrata was the biggest loser in the sector, shedding 19.5p to 871.5p, while Rio Tinto weakened 32p to 1442p.

BHP Billiton was off 12p at 572p while Anglo American dipped 20p to 1185p.

Crude oil for January delivery rose 2.2% to 42.35 US dollars a barrel in New York after a government report that US inventories of heating oil and diesel increased less than expected.

Despite that, BP was off 7p at 507p, Shell drifted 4p to 430.5p and Cairn Energy slipped 65p to 1373p.

International banking group Standard Chartered was off 2% or 21p at 961p after Dresdner Kleinwort Wasserstein downgraded the stock following what it described as a “weak” trading statement.

Those trying to lift the mood included brewer Scottish & Newcastle, whose stock rose 3p to 434p after it announced a deal to run an additional 364 pubs for newly formed Globe Pub Company.

Transport group Stagecoach topped the FTSE 250 risers with a lift of 13% or 13.75p to 114p after the performance of its London bus operation helped it to beat expectations for half-year profits. Rival second flight group National Express followed in its footsteps, picking up 11.5p to 779.5p.

Utility group Kelda was another riser, up 1p at 564.5p, after its core Yorkshire Water business continued to perform well, offsetting the impact of the weak US dollar on its business across the Atlantic.

But packaging specialist DS Smith saw its shares fall 5.25p to 142.75p after it said higher energy and raw material costs had helped to push first-half profits down 11%.

Biggest risers were British Land, up 31p to 844p, Enterprise Inns ahead 18.5p to 720.5p, William Hill adding 12.5p to 545.5p and Severn Trent lifting 14p to 954.5p.

Largest losers included DMGT, off 33.5p at 693.5p, Cairn Energy down 65p to 1373p, Hanson losing 11.5p to 409.75p and BAE Systems slipping 6p to 238.5p.