A healthy start to the session on Wall Street helped to keep the London market in the black today.
Investors took heart from a clutch of better-than-expected corporate results in New York to leave the FTSE 100 Index 3.9 points ahead at 4847.1 by the close.
US stocks advanced after earnings at companies ranging from Texas Instruments to Eli Lilly and Eastman Kodak topped analysts’ forecasts. The Dow Jones Industrial Average lifted nearly 35 points shortly after London’s close.
In the UK, heavyweight stocks Vodafone and Prudential gave the top flight a good start, but weaker banking stocks overshadowed progress as hopes for an interest rate cut began to diminish.
The hopes of lower borrowing costs were hit by stronger-than-expected fourth quarter growth and a Bank of England report that showed lower rates were no longer in the thoughts of Monetary Policy Committee members.
On the corporate front, Prudential impressed the market with sales of new insurance products at a record £1.85bn (€2.7bn) in 2004 – up 19% on a year earlier.
The figures were ahead of City expectations and sent the blue-chip stock up in early trading, although it was unchanged at 456.5p by the close. The rest of the sector lost out, with only Royal Sun Alliance avoiding a deficit, standing unchanged at 86.25p.
Mobile phone giant Vodafone subsided after a strong start, ending the day 0.5p off at 139.25p after growth in subscriber numbers during the final three months of last year topped expectations and marked its best quarter since 2000. Rival mmO2 moved 0.75p ahead to 125p.
The banking sector was proving to be a drag on the market after Northern Rock failed to impress investors at the start of the reporting season for UK banks.
Its shares eased 23p to 775p as it forecast weaker demand for mortgages in the UK during 2005 and 2006, although annual profits were in line with expectations and its strategic targets were unchanged.
Among its rivals, Alliance & Leicester fell 20p to 882p, Royal Bank of Scotland slipped 21p to 1741p and Barclays eased 10p to 574p.
There was also movement in the supermarket sector as investors continued to speculate about the possibility of a bid for Sainsbury’s. Amid heavy volumes, the stock lifted 4p to 281.5p and pulled Morrisons up 1.25p to 202.75p.
Telecoms group Cable & Wireless topped the Footsie risers board – up almost 3% or 3p to 122p – as investors continued to react positively to yesterday’s third quarter trading figures.
Outside the top flight, bakery group Inter Link Foods put on weight, rising 7% or 45p to 700p, after announcing its biggest ever acquisition with the purchase of Yorkshire Cottage Bakeries for £12.25m (€17.6m).
The biggest Footsie risers were Cable & Wireless up 3p at 122p, British Airways ahead 5.75p at 256.25p, Capita Group up 7.5p at 362.25p and Rentokil Initial ahead 3p at 147.5p.
The biggest fallers were Northern Rock down 23p at 775p, Alliance & Leicester off 20p at 882p, Xstrata down 19.5p at 916p and Barclays off 10p at 574p.