London’s leading share index closed in positive territory today despite a rollercoaster session that saw blue chips swing between losses and gains.
The FTSE 100 Index ended the day up 50.3 points at 5476.6 in an extended trading session, with the close delayed by half an hour due to unusually high volumes.
The London market had fallen as much as 68 points at one stage amid more signs of economic trouble, record oil prices and a European interest rate hike.
Data showed a second successive month of falling service sector activity, with both Chancellor Alistair Darling and his US counterpart Hank Paulson warning of slowing growth at a meeting today in London.
Brent crude also topped US$146 a barrel creating further gloom, while traders were also digesting a quarter-point rise from the European Central Bank.
The ECB’s move was widely expected, but it was seen as strengthening the euro at the expense of the dollar, with fears that this could lead to even higher oil prices.
Economic data out in the US also added to the volatile trading. The US Government reported that 62,000 jobs were lost in June, but that number was close to economists’ forecasts and eased fears that the snapshot of the labour market would be more grim.
However, figures showed the US services sector contracted last month, catching economists by surprise and leaving investors with a raft of figures to digest.
In London, banks were the biggest gainers as investors took advantage of historic share price lows. Halifax Bank of Scotland added 18.25p to 279.25p – 7% - and Royal Bank of Scotland was up 9p to 213p.
Broadcaster ITV clawed itself back from levels close to all time lows in early session trading, seen amid concerns for the advertising market outlook in the event of a deepening economic downturn. Shares closed up 1.1p at 41.1p.
Engineering firm Amec, which has significant interests in the oil and gas sector, was another of the leading Footsie risers after raising its expectations for the year. This lifted shares 24.5p to 874p, almost 3%.
Drugs giant AstraZeneca also gained 81p to 2314p following a broker upgrade after its patent victory yesterday. Rival GlaxoSmithKline added 35p to 1181p.
On the downside, retailers were suffering another torrid day. Marks & Spencer, which shed 25% yesterday after a shock profit warning, was on the back foot again today as investors continued to desert the stock. M&S was 4p down at 236p.
B&Q owner Kingfisher dropped 1.6p to 100p after Panmure Gordon marked down the stock, but supermarket Sainsbury’s was the biggest Footsie faller, down 10p at 280p.
In the second tier, video games firm Game Group shed nearly 5%, or 12p, to 250.25p in spite of another strong trading update as investors took profits amid talk that the shares had peaked.
The biggest Footsie risers were HBOS up 18.25p at 279.25p, Antofagasta up 36.5p at 604.5p, RBS ahead 9p at 213p and Imperial Tobacco up 74p at 1845p.
The biggest Footsie fallers were Sainsbury’s down 10p at 280p, Sage Group off 6.3p at 191.2p, BG Group down 39p at 1218p and Ferrexpo down 10.5p at 332.5p.