FTSE rallies to modest fall

The London market staged a rally in afternoon trading today, recouping some of its losses from earlier in the session following falls in China overnight.

The London market staged a rally in afternoon trading today, recouping some of its losses from earlier in the session following falls in China overnight.

Investors were exercising caution after the Shanghai Composite Index slumped by more than 6% as the Chinese government imposed a tax on stock trades in an effort to cool the booming market.

However, a firm opening on Wall Street helped allay traders’ concerns to see the FTSE 100 Index close down only 4.4 points at 6602.1. Earlier in the day, the benchmark index had fallen by as much as 1%.

Insurer Resolution was the session’s biggest loser after its shares turned ex-dividend, meaning that investors are not entitled to the latest dividend payment. Its shares were down 18p at 627p.

Fellow insurer Prudential was also on the back foot following a downgrade from ING Bank, which downplayed hopes of a lucrative break-up of the group and rated its shares – off 7.5p at 756.7p – expensive against the sector average.

Friends Provident, also in the life and pensions sector, suffered losses, down 2.75p at 197.5p, as did Royal and Sun Alliance as it went ex-dividend, off 2.6p at 159p.

Pharmaceuticals giant GlaxoSmithKline enjoyed a reversal of fortunes after it said additional data from several large clinical trials supported the safety profile of its diabetes drug Avandia. Analysts said the latest data shows fears over the drug had been overplayed and expect the damage to the company to now start to reverse. The stock was up by nearly 2%, or 22p to 1328p.

Property companies featured heavily on the risers’ board with Land Securities leading the pack. The stock rose 34p to 1888p boosted by director share-buying. British Land followed behind, up 25p at 1425p.

Mining stocks enjoyed a lift amid buoyant base metal prices. Kazakhmys was ahead 16p at 1259p and Xstrata gained 23p to 278p.

Meanwhile, Antofagasta cheered 4.5p to 544.5p after it posted a 19% rise in first-quarter earnings on higher copper prices.

Outsourcing group Capita climbed 9.5p to 728p after the outsourcing firm announced a 12-year contract with life insurance firm Resolution worth £580 million.

In the second tier, nuclear power firm British Energy saw shares tumble almost 6% on news the Government is to cut its stake in the group from 64% to 39%. Shares stood 32.25p down at 537p.

IT firm LogicaCMG moved in the opposite direction with a gain of 4% amid reports of a possible bid from private equity firm Permira. The shares were ahead 6.25p at 167.75p.

Elsewhere, Capital Radio and Classic FM parent group GCap Media saw its share price dive 14%, or 36p to 222.5p, after reporting that its full year underlying profits were down 35% at £14.4 million and announcing a cut in final dividend from 6.15p to 1.5p.

The biggest Footsie risers were Imperial Tobacco ahead 48p at 2195p, Land Securities up 34p at 1888p, British Land ahead 25p at 1425p and GlaxoSmithKline up 22p at 1328p.

The biggest Footsie fallers were Resolution down 18p at 627p, British Airways down 9.5p at 473p, Daily Mail & General Trust off 14p at 844.5p and Royal & Sun Alliance down 2.6p at 159p.

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