Small gains on FTSE

The London market made tentative gains today after European leaders said they stood “shoulder to shoulder” with debt-laden Greece but failed to outline a rescue plan.

Sentiment improved slightly after Germany and France offered moral support to the stricken economy.

The FTSE 100 Index closed up 29.5 points at 5161.5 at the end of a volatile day dominated by the tense EU summit.

Wall Street also recovered its poise after falling heavily on the open. The Dow Jones Industrial Average was up 0.5% in the wake of much better than expected US jobless claims and the united front shown by Europe.

But EU nations offered no firm financial support for Greece and leaders deferred the issue until March, saying they would seek advice from the International Monetary Fund for an assessment of Greece’s situation.

The euro remained under pressure against the US dollar and the pound, falling as much as 1% against the greenback before recovering slightly.

The pound was up 1% against the single currency at €1.14 and also climbed to $1.56.

In London BT was the biggest faller – slumping almost 9% or 11.5p to 119.9p - after it revealed the Pensions Regulator still had “substantial concerns” about the company’s plans for tackling its £9 billion pensions black hole.

The falls came despite news that the telecoms firm had reached agreement with trustees about addressing the pensions shortfall over 17 years. BT’s third quarter results were also slightly ahead of expectations.

Mining firms were in favour after Rio Tinto recorded a 33% increase in net profit for 2009 due to record sales of iron ore and an increase in copper and gold production.

Rio shares jumped 76.5p to 3216p, a gain of 2%, while BHP Billiton lifted 45p to 1901.5p and Antofagasta added 24.5p to 871p.

The top spot in the FTSE 100 Index was reserved for engine giant Rolls-Royce, which defied earlier City expectations for a drop in underlying profits by revealing a 4% rise instead.

Announcing a record order book of £58.3bn at the end of 2009, chief executive John Rose said the company’s performance in 2010 should match last year in terms of revenues and profits.

Shares responded to the guidance by rising 6% or 31.7p to 520.5p.

As well as the sharp drop for BT, Diageo shares fell after the drinks company reported slightly lower first half profits as recession-hit drinkers switched away from premium brands towards cheaper lines.

Shares in the Guinness-to-Smirnoff firm were 7p lower at 1018p.

Banks were also lower as Lloyds dropped 1.86p to 48.15p, Barclays fell 9.5p to 268.35p and Royal Bank of Scotland slipped 0.73p to 31.87p.

Outside the top flight, shares in Sports Direct International jumped 8% after it raised earnings guidance for the year to April. With Competition Commission officials also clearing its acquisition of 31 JJB stores, shares rose 7.7p to 104.7p.

The biggest Footsie risers were Rolls-Royce up 31.7p at 520.5p, Smith & Nephew up 27p at 660p, Antofagasta up 24.5p at 871p and Cairn Energy up 8.6p at 337.2p.

The biggest Footsie fallers were BT down 11.5p at 119.9p, Lloyds Banking Group down 1.86p at 48.15p, Barclays off 9.5p at 268.35p and British Airways down 7.2p at 203.9p