FTSE cheered by ITV, BA, BP

An upbeat start to trading across the Atlantic drove the FTSE 100 Index to a positive finish today.

The London market fell as much as 40 points earlier in the session after the Bank of England’s latest forecasts pointed to another hike in borrowing costs in order to keep inflation at 2% over a two-year horizon.

But a strong performance from ITV, British Airways and a recovery from BP helped the Footsie regain lost ground to close 42.4 points ahead of its starting point at 5860.5.

The UK’s largest commercial broadcaster ITV topped the leaders board with a surprise jump of 4% after shaking off earlier disappointment at its latest gloomy advertising figures.

The stock was 4.25p higher at 102.5p, as analysts took note of chief executive Charles Allen’s promise of a strong autumn and winter schedule, as well as the fact that profits rose by more than some analysts expected.

British Airways was not far behind with a 3% surge, up 11.75p to 390p, following an upbeat broker note.

Energy giant BP recovered some of the ground lost in the previous two sessions following its Alaskan oil field closure. Shares were up 5.5p to 619.5p.

Going in the opposite direction, mining stocks were down amid speculation that further rate hikes could also be looming in the United States. Xstrata led the way with a drop of 27p to 2190p, while Rio Tinto eased 28p to 2722p.

PartyGaming was at the top of the fallers board as the gaming industry digested fresh regulatory worries, this time from Germany amid signs that the state of Saxony intended to withdraw a betting licence for an online operator.

PartyGaming fell 6p to 112.25p, a drop of 5%, while 888 Holdings dipped 8.25p to 156.75p in the FTSE 250 Index.

Market pressure was also caused by a number of stocks going ex-dividend, meaning investors lost the right to the latest dividend payment. They included Lloyds TSB, which fell 9.5p to 511.5p, while AstraZeneca dipped 8p before recovering to finish 8p ahead at 3213p.

Insurer Aviva failed to secure any reward for strong profits growth over the past half year.

Shares were down 14p at 718p, despite the firm forecasting further strong growth in its UK market for the rest of the year as it reported operating profits rose 27% to £1.7bn (€2.5bn).

Software group Sage also fell earlier in the day but closed 0.25p higher at 222.25p after it announced plans to spend £297m (€439,900) on Emdeon Practice Services, which provides software and services to doctors and small clinics in the United States.

Outside the top flight, food equipment maker Enodis found itself on the slide, 37.5p to 179.5p or 17%, following the collapse of takeover talks with Manitowoc.

The day’s biggest blue-chip risers were ITV up 4.25p to 102.5p, British Airways up 11.75p to 390p, International Power up 7.75p to 306.25p and BT up 6.25p to 249.5p.

The day’s biggest blue-chip fallers were PartyGaming off 6p to 112.25p, Corus down 9.5p to 379.25p, Aviva off 14p to 718p and Lloyds TSB down 9.5p to 511.5p.