FTSE up and down as oil stocks see dips

The London market struggled for direction today as shares drifted around their opening marks.

The FTSE 100 Index slipped into the red in early trading as miners and oil stocks weighed heavily on the market.

But it bounced back to stand 6.5 points higher at 5857.3 by mid-morning despite official data showing that the rate of inflation increased in August - adding to calls for a hike in interest rates.

Among the biggest blue chip risers was defence stock BAE Systems which added 2% or 6.75p to 379.75p as investors hope for a strong set of first half results tomorrow.

It was a day of contrast for the miners, which have struggled in recent days amid the weakening price of metals. Vedanta Resources was up 25p to 1264p today but rival Kazakhmys fell 18p to 1208p and Lonmin was down 27p to 2649p.

However, the heaviest faller was broadcaster ITV as analysts predicted further declines in advertising revenues at its flagship ITV1 channel. Shares were down more than 3% or 3.5p to 97.5p.

Coal-fired power station Drax was also on the slide and dropped 22p to 851.5p as soaring profits came in marginally below expectations and analysts pointed to slight concerns over emission quotas in the future.

Elsewhere, shares in fashion retailer French Connection lifted 0.75p to 207.5p despite a disappointing first-half performance, after it said sales were now picking up following improvements to the autumn and winter collections.

And Thorntons added 3% – up 4.5p to 138p – after the confectioner said the reduction in like-for-like sales slowed in the second half. It also announced chief executive Peter Burdon was to step down.

Housebuilders were also on the front foot after Redrow reported a stronger second half of the year on the back of a recovering housing market. Shares were up 12p to 542p while Oakdene Homes was up half a penny to 171.5p after it too reported strong results.