FTSE struggles to make gain

The FTSE 100 Index continued to fluctuate today as the London market set about putting back losses seen in its previous two sessions.

Strong results from More Than insurer Royal & Sun Alliance helped the mood, although Tesco shares slipped 2% as it emerged that the Office of Fair Trading had ordered a full scale inquiry into the grocery sector.

Overall, the Footsie stood 36.4 points higher at 5849.3 by mid-morning, as the market recovered from two days of selling that saw the index sink from near five year highs of more than 5900 back towards the 5800 mark.

The mining sector also staged a come-back after weaker metal prices and a heavy bout of profit-taking saw it suffer earlier in the week. Kazakhmys was the beneficiary, up 26p at 851p, while Rio Tinto added 22p to 2610p.

But R&SA topped the blue-chip risers board as investors welcomed its annual results, which delivered profits well above City expectations.

Shares in the stock cheered 3% or 4.25p to 129.75p as the insurer unveiled a surplus of £698m (€1bn) and said it was making progress in “de-risking” its US business.

British Airways was on the risers board as it met investors to discuss plans for £450m (€656m) of cost savings in the next two years and said its fuel bill for 2006/2007 would rise £400m (€583m) to £2bn (€2.9bn). Shares were up 7.25p to 324p.

On the downside, supermarket Tesco bore the brunt of the OFT’s referral of the grocery market to the Competition Commission.

Shares were 2%, or 6.75p, lower at 325.25p while the impact on rivals Morrisons and Sainsbury’s was seen as being neutral after the pair stuck close to their opening marks.

Elsewhere, Lookers shares were up 11% or 67.5p to 677.5p after rival car dealership Pendragon tabled a hostile bid of £258.8m (€377.2m).