FTSE recoups some losses

London’s blue-chips made tentative gains today after recent fears over the US housing market overshadowed trading.

After yesterday’s 2% fall, the FTSE 100 Index recouped further losses to edge into positive territory by mid-morning, up 2.8 points to 6501.5.

The fragile recovery followed developments in the US, where further evidence regarding the fragile state of the property market resulted in the Dow Jones Industrial Average falling by almost 2% last night.

Investors took flight into heavily-weighted defensive stocks such as BT and Vodafone, giving impetus to the index. BT made gains of more than 1%, or 4.75p, to 327.25p, while Vodafone was 1.5p higher at 157.5p.

Royal Dutch Shell, another of the index’s big hitters, was 13p ahead at 2022p as analysts anticipated a 7% rise in second quarter profits from the oil major tomorrow.

The leading Footsie riser was defence giant BAE Systems, up 22p to 1320p on reports that the Government is set to give the go-ahead for the building of two new aircraft carriers.

Reckitt Benckiser also joined the risers board after it said it was likely to better its full-year targets for revenues and income growth. The stock rose 21p to 2769p, although analysts were disappointed the Harpic owner said it would not set new targets until October.

Among the fallers, Resolution slipped after announcing details of a £8.6bn (€12.8bn) merger with Friends Provident. Resolution was down 16.5p to 614.5p, but shares in Friends gained 0.7p to 197.2p with analyst talk of a rival bid potentially emerging.

The leading faller was British Energy, off nearly 3%, or 13.25p, to 496.75p, on a broker downgrade over the impact of cheaper oil on power prices.

In the second tier, a healthy trading update from bike retailer Halfords lifted its shares by 1.25p to 391.25p. But Sports Direct International fell another 2% - or 3p to 144p – after tumbling 23% in the wake of a profits warning yesterday.