Footsie recovers to close in the black

London shares ended Wednesday in the black after recovering from a late downturn sparked by Wall Street.

After rising 48 points in early trading, the FTSE 100 Index slipped to an intra-day low of 5193.5 during the afternoon, but rebounded to close 13.7 points up at 5215.2.

A surprise set of downbeat reports from US companies including General Motors caused the Footsie's brief foray into the red.

The Dow Jones Industrial Average dropped nearly 29 points after GM reported a second-quarter loss as it increased discounts.

Semiconductor maker Intel also disappointed the market by maintaining its full year gross margin forecast of 59%, after analysts had expected an increase.

Federal Reserve Chairman Alan Greenspan added to the gloom by signalling more potential interest rate rises.

Back in London, investor indecision about the first day of trading of shares in newly unified oil giant Royal Dutch Shell pulled the market in different directions.

After rising as much as 9p in early trading, `B' shares from the UK side of Royal Dutch Shell retreated to stand 39.5 points off at 1806.5, while Shell `A 'shares originating from the Dutch side of the business fell 3% or 58p to 1766.5p. The stock accounts for about 9.4% of the value of the Footsie.

However, news that the Bank of England had narrowly refrained from cutting interest rates this month buoyed the City.

There was also support from the mining sector where optimism about further growth buoyed BHP Billiton, up 29p to 772p, Rio Tinto climbed 78p to 1838p, Antofagasta gained 42p to 1278p and Xstrata added 32p to 1148p.

On the corporate front, GUS was the highest blue-chip riser, adding 5.5% or 47p to 901p after saying a strong performance from its credit checking business Experian was offsetting the trading troubles of its retail division.

Telecoms group O2 also made strong gains after revealing it added more UK customers than expected in its first quarter. Shares lifted nearly 2% or 2.25p to 138.75p.

Rival Vodafone was also doing well, lifting nearly 1% or 1.25p to 142.25p, after buying back 15 million shares.

Elsewhere, United Business Media lifted almost 4% or 19.25p to 513.25p after agreeing to sell its share in Channel Five for £247.6 million. European television broadcaster RTL is set to buy the 35.4% stake in a move that will give it full control of the channel.

Shares in Clinton Cards lost 12% of their value, down 10p to 73p, after the retailer warned on profits after sales fell and efforts to rejuvenate the Birthdays chain ran into trouble.

UK Coal also fell nearly 2% or 2.5p to 139p after it announced plans to halt production at Harworth Colliery near Doncaster when the current coal seam was exhausted.

Biggest risers included GUS up 47p to 901p, Rio Tinto advancing 78p to 1838p, BHP Billiton gaining 29p to 772p and Antofagasta adding 42p to 1278p.

Largest fallers were Amvescap down 6.75p to 410.25p, Man off 25p to 1531p, Capita losing 5p to 345.25p and SAB Miller weakening 12p to 968p.