FTSE closes on the up

The FTSE 100 Index finished moderately higher after an unconvincing session for world markets today.

Mining stocks ensured the London market built on Friday’s strong session, but with the Dow Jones Industrial Average close to its opening mark investors were in no mood for widespread buying.

As a result, an early rise of 99 points faded to leave the Footsie 14.5 points higher at 6078.7 by the close. The benchmark index had rallied 3.5% on Friday following the US Federal Reserve’s decision to cut the interest rate it charges banks to borrow money.

That move helped soothe market jitters with investors quick to snap up bargains after the lows seen last week.

Mining stocks filled a number of the slots on the Footsie risers’ board, buoyed by strengthening metal prices. Risers included Kazakhmys after a gain of 45p to 1170p, while BHP Billiton added 51p to 1275p.

The biggest gain of the session came from nuclear power firm British Energy after an upgrade by Goldman Sachs. In light of first quarter results and the recent decline in the company’s share price, the investment bank said BE shares had a 28% potential upside to its newly revised three month target of 536p.

The stock jumped 5% or 19.75p to 451.25p.

Elsewhere in the energy sector, oil giant BP fell 2.5p to 538.5p and Royal Dutch Shell dipped 1p to 1838p after it became apparent that Hurricane Dean would not disrupt production and refining operations in the Gulf of Mexico.

Northern Rock also recovered after last week’s credit turmoil for its shares, although the gain was limited to 6.5p at 716p by the close.

HSBC was in the red as it revealed it was in talks to buy a majority stake in Korea Exchange Bank from Lone Star Funds. Shares slipped 8p to 894p.

Other banking stocks were uncertain, with Royal Bank of Scotland ahead 1.5p at 577p but Barclays off 5p at 634.5p and Asian-facing bank Standard Chartered losing 39p to 1521p.

And Sainsbury’s shares remained under pressure amid concern that tight credit markets could hamper takeover prospects. The stock was 10p lower at 510.5p, well below the proposed 600p offer price from Delta Two.

Moving in the opposite direction, Morrisons lifted more than 2%, or 5.5p to 262.5p after reports at the weekend said chairman Sir Ken Morrison was reviewing his 10% stake in company.

Meanwhile, shares in property firms were under pressure, with British Land down 43p at 1198p, Segro off 14p at 513p and Land Securities down 33p at 1728p. Housebuilder Persimmon fell 23p to 1250p as it prepared for the release of half-year results on Tuesday.

The biggest Footsie risers were British Energy up 19.75p at 451.25p, BHP Billiton ahead 51p at 1275p, Kazakhmys up 45p at 1170p and BAE Systems ahead 14.5p at 431p.

The biggest fallers were British Land down 43p at 1198p, Segro off 14p at 513p, Reed Elsevier down 15.5p at 578p and Standard Chartered off 39p at 1521p.