US car rescue plan boosts FTSE

The FTSE 100 Index finished the session just 1% lower today after a bail-out of the US car industry helped Wall Street markets open on the front foot.

Details of the potential 17.4 billion US dollar rescue for America’s big three car makers eased nerves after a heavy fall for London shares in early trading.

Weaker commodity stocks meant the Footsie had been as much as 3% lower before recovering to close the week down 43.7 points at 4286.9.

Miners littered the Footsie fallers board after Goldman Sachs cut target prices on a host of firms and UBS raised the possibility that Xstrata could breach its debt covenant next year.

Xstrata slumped 11% or 82.5p to 645.5p, while falling metal prices meant Vedanta Resources dropped 63p to 602p and Rio Tinto declined 100p to 1429p.

Crude oil on the New York Mercantile Exchange for February delivery was hovering above 41 US dollars a barrel, hitting heavyweights BP and Royal Dutch Shell in London.

While Prime Minister Gordon Brown stressed the damaging impact of volatile oil prices at a London conference, BP shed 4% or 19.5p to 505p, while Shell was off 21p at 1727p.

Banks added to the market’s early malaise after more downbeat broker sentiment - this time from Merrill Lynch, which predicted a longer than expected recession.

Royal Bank of Scotland closed 3.1p lower at 43.4p and HSBC fell 12.5p to 612.75p but Barclays bucked the trend with a rise of 8.3p to 148.3p and Lloyds TSB added 8.2p to 134.6p.

Among other risers, cruise ship firm Carnival gained further ground after forecast-beating results in the previous session. The stock rose 54p to 1496p.

High street retailer Marks & Spencer closed 1.5p higher at 225.75p despite brokers at KBC Peel Hunt kicking off coverage of the firm with a sell rating. In a positive session for the retail sector, Tesco rose 4% or 15.4p to 358.4p and Morrisons gained 2.75p to 275.25p.

On a quiet day for corporate news, car dealership Lookers saw shares fall 12% after it said it was likely to make a bottom-line loss this year.

Lookers fell 1.25p to 21p or 6%, but luxury dealer HR Owen fared worse still after it predicted “severely depressed” conditions would remain next year. Shares fell 15p to 57.5p, or 21%.

A downbeat trading update from oil and gas services firm Hunting sent shares 22.75p lower at 422.25p after it warned of an uncertain outlook next year.

This hit energy services group Amec, down 16.75p to 492.75p in the top tier. Wood Group was 6.3p down at 194.2p, a fall of 3%.

The biggest Footsie risers were RSA Insurance up 15.8p at 151.8p, Capita Group ahead 48p at 769.5p, Lloyds TSB up 8.2p at 134.6p and Barclays ahead 8.3p at 148.3p.

The biggest Footsie fallers Xstrata down 82.5p at 645.5p, Vedanta Resources off 63p at 602p, Anglo American down 142p at 1450p and Standard Life off 19.75p at 215.25p.