Blue chips make gains on FTSE

London’s blue chips made tentative gains today as financial stocks recovered from a shaky start.

The FTSE 100 Index was as much as 40 points lower in early trading amid further fears over credit liquidity and as a downgrade for several banks weighed on stocks.

But the benchmark index recovered to stand 10 points higher at 6325.2 by mid-morning, after firmer oil prices buoyed energy groups.

BG Group was 13.5p higher at 795p, while oil majors Royal Dutch Shell and BP gained 26p to 1955p and 3.5p to 554p respectively.

But the leading Footsie riser was miner Kazakhmys, which pleased the City with better-than-expected interim results and was rewarded with a near 3%, or 38p, rise to 1337p.

Life and pensions group Standard Life also made progress on strong corporate numbers, ahead 1p at 305p after posting a forecast-beating 71% rise in interim operating profits.

Banks began the session on the back foot after interbank lending rates hit their highest level since 1998, adding more fuel to credit concerns.

UBS downgrades for several stocks including HSBC, down 2.5p at 894.5p, and Standard Chartered, down 9p at 1547p, also weighed, but shares across much of the sector recovered most of the losses seen earlier in the session.

However, investors gave property stocks the thumbs-down today after figures from real estate investment trust Hammerson confirmed that the UK property market was continuing to slow, despite interim results beating analyst forecasts.

Hammerson was down 23p at 1311p, while Liberty International was the leading Footsie faller, off 24p at 1173p. Segro – the former Slough Estates – was also down 6p at 542p as analysts at JP Morgan took a downbeat view of the sector.

In the second tier Branston Pickle maker Premier Foods gained 3%, or 7.25p, to 247.75p after the company said it was confident of meeting full-year expectations and cost-saving targets.