FTSE in positive territory

The FTSE 100 Index was trading in positive territory today after a key Bank of England report failed to cause any shocks in the London market.

Even with oil major BP in negative territory, the FTSE 100 Index continued its upward push to stand 15.8 points higher at 5379.5 by lunchtime – another three year high if the improvement is maintained through to the close.

Analysts earlier took the Bank of England’s inflation report in their stride as guidance for lower growth in 2005 and rising inflation was expected.

Much of the focus was on the insurance sector on the eve of results from two of its biggest players, Aviva and Royal & Sun Alliance.

The mood was helped by financial services stock Old Mutual, which rose to the top of the FTSE 100 Index after beating expectations for earnings.

The insurance and banking company was up 5.5p at 136.25p and was followed by Norwich Union owner Aviva, up 18.5p at 661.5p after it also announced that Lord Sharman would become its chairman.

General insurer R&SA rose 0.25p to 92.75p, while the Prudential surged 8p to 539.5p and Legal & General added 0.75p to 111.75p.

B&Q owner Kingfisher was second on the risers board as speculation grew that a subsidiary of US conglomerate Berkshire Hathaway was building a stake. The stock, which has regularly generated takeover talk in the past, was up 9.5p to 255.25p, a gain of almost 4%.

Among other retailers, Marks & Spencer rose 4p to 358.5p and Dixons cheered 2.75p to 157.75p.

Elsewhere, oil giant BP was 1p lower at 658p following gains in recent days, although rival Royal Dutch Shell surged 34p to 1943p after announcing details of a share buy-back scheme.

And disappointment at comments by Scottish Power that it was being forced to slow the rate of new energy customers it attracts because of high wholesale prices pegged its shares to a half a penny rise at 499p.

The company said it had been happy with its first quarter performance, which showed a 41% hike in underlying profits to £147m (€212.9m).

BAA was still on the back foot, however, with its shares 3.5p lower at 608p after it said growth at its seven UK airports was restrained by the London bombings last month.

Outside the top flight, soft drinks group Nichols rose 2% or 4.5p to 195p after profits rose in the first half of this year and its Vimto brand captured further market share despite heavy promotional activity by rivals.