FTSE enjoys decent gains

The London market began the week in buoyant mood today after a ceasefire in Lebanon and a downgrade of the terror threat in the UK.

The crisis in the Middle East and the alleged plot in the UK to blow planes out of the sky hurt shares in London last week.

But the FTSE 100 Index closed 50.8 points higher at 5870.9 today with British Airways among those on the move, although fears over rising interest rates could return to haunt the markets tomorrow when inflation figures are released.

Jimmy Yates, trader at CMC Markets, said: “Arguably there may be scope for further gains – the Footsie came close to testing 6000 less than a month ago - but with thin volumes continuing over the summer and an uncertain outlook for monetary policy, the appetite to start building new long positions doesn’t seem to be appearing just yet.”

Shares in airlines fell last week after the alleged plot was thwarted by the police in a series of raids across the UK.

But BA gained 2% or 7p to 377p today after the UK security threat level was lowered from critical to severe.

BA also benefited from a fall in oil prices as a ceasefire in Lebanon took hold. The cost of crude has soared in recent weeks amid fears supply could be hit by an escalation in tensions in the Middle East, but it fell by more than a dollar a barrel today.

The price fall was helped by news that BP will not shut its Prudhoe Bay oil field in Alaska despite the discovery of a leak. Shares in BP lifted 5p to 616p today, while Royal Dutch Shell was up 4p to 1926p.

Pubs firm Enterprise Inns lifted 10p to 991.5p after selling 769 pubs to Admiral Taverns for £318m (€66.93m). Enterprise said the transaction was part of a plan to improve the quality of its estate by offloading pubs that did not meet its objectives.

But in the second flight, building and maintenance firm Interserve plunged 21% - down 75p to 281p – after it said a mis-statement of its accounts would reduce its net assets by £25 million on a post-tax basis.

Six senior members of staff have been suspended after the accounting irregularities emerged and an independent review is being carried out.

Interserve was followed down by recruitment firm Michael Page which fell 15.75p or 5% to 310p despite reporting positive results.

The London-based company said turnover from operations worldwide rose by 24.6% to £312 million, while operating profits were up 47.4% to £45.1m (€66.93m) in the six months to the end of June but analysts were concerned profits would drop as investment stepped up.

The day’s biggest blue chip risers were Schroders VTG up 57p to 929p, Schroders non-VTG up 50p to 871p, Drax 28p higher to 972.5p and ICAP 12.5p ahead at 462p.

The heaviest fallers were PartyGaming off 3.75p to 105.25p, Corus down 6.5p to 381.75p, Xstrata 33p lower at 2220p, and Carnival down 21p to 2023p.