FTSE inches forward

Declining oil and commodity prices prevented the FTSE 100 Index from today making a stronger recovery after Friday’s drop of more than 70 points.

The Footsie was 9.2 points higher at 5831.5, helped by rises of more than 2% for catering company Compass and cruise ship company Carnival.

The upbeat mood was soured by BP, which fell 7p to 567p on lower oil prices, while mining stocks were also under selling pressure. Xstrata was off 71p to 2042p, BHP Billiton dipped 24p to 863p and Rio Tinto fell 50p to 2357p.

Banks provided a large slice of the upside, following reports suggesting that Bank of America had its sights set on the European banks.

That lifted HSBC by 6.5p to 958.5p, Barclays by 6.5p to 665p and HBOS ahead 8p to 1048p. Among smaller banking shares, Alliance & Leicester gained 8p to 1072p.

Lower oil prices helped Carnival to rise by 65p to 2450p, while prospects for a cost-cutting drive at Compass helped its shares up by 8.75p to 278.25p.

The main corporate news concerned the stock market itself after news of aborted merger talks between LSE and money broker Icap, which specialises in electronic derivatives, fixed income and other money-market broking.

Icap shares were ahead for a time as analysts noted the group is the partner of choice as exchanges move closer together. The stock later retreated to stand 2.5p lower at 510.5p.

LSE added 3p to 1246p after analysts suggested it is now vulnerable to a new offer from Nasdaq with a bid expected as early as next week.

Going the opposite direction, Plumb Center owner Wolseley slumped 5% with a loss of 57p to 1107p, despite posting a 19% rise in annual underlying profits after it said it was placing new shares to fund acquisitions.

Elsewhere, clothing retailer Austin Reed gained 3% – a lift of 4p to 138.5p after it reported a return to first-half profitability.

The high street chain, also home to CC, posted pre-tax profits of £500,000 (€744,000) in the 28 weeks to August, compared with losses of £1.1m (€1.6m) during the same period last year.