Dollar rebound helps FTSE

The FTSE 100 Index swung 100 points into positive territory after a rebound for the US dollar reversed a weak start for London shares today.

Early trading saw the Footsie slide 60 points, adding to the 134 points – or £34.3bn (€50bn) – lost last night amid fears over the weaker US dollar and ongoing worries about the performance of the world's biggest economy.

But a recovery for the dollar enabled the Footsie to claw back lost ground s it stood 35.9 points higher at 5687.9 by mid-morning.

It had been 54 points stronger at one stage as evidence of a softening in the UK housing market lessened expectations of an interest rates rise by the Bank of England.

The second tier FTSE 250 Index shared in the recovery with a gain of almost 100 points.

Utility companies provided the main refuge for investors with International Power up 11.75p at 286.75p amid hopes of consolidation in the sector. That followed news that an offer worth eight billion US dollars by Mirant for US power firm NRG had been rejected.

British Energy shares were ahead 24p to 691p while Scottish & Southern Energy rose 9p to 1097p after annual results met market expectations.

Financial companies added some backbone to the market after Friends Provident benefited from an upgrade by analysts at Credit Suisse. Friends shares jumped 3%or 5.5p to 178.75p, while Prudential added 8.5p to 585p and Barclays cheered 18p to 607.5p, a gain of more than 3%.

Boots led the fallers board with the retailer 3% or 20p lower at 711.5 as shares no longer carried the right to the latest dividend payment.

Shares in mobile phone group Vodafone continued to benefit from a positive reception to yesterday's results and strategy update. The stock was near the top of the risers board after a gain of 2.5p to 122.25p.