Little overall movement for FTSE

The FTSE 100 Index suffered an uncertain session today as traders digested mixed messages on the economic recovery.

Money markets were reassured by last night’s agreement on the UK’s first coalition government since the war, but this was offset by later comments from the Bank of England that risks to the UK economy remain on the downside.

This prompted analysts to put back their expectations for interest rate rises, causing a reversal in sterling’s initial gain against the dollar and meaning the FTSE 100 Index slipped 1.8 points to 5332.5.

Markets were also dogged by lingering uncertainty about the eurozone debt crisis, despite last weekend’s massive rescue package. Asian and Wall Street both closed lower last night, although the Dow Jones Industrial Average is expected to open slightly higher later today.

Banks were among those in uncertain form, with Royal Bank of Scotland surrendering an earlier gain to stand 4% or 2.1p lower at 47.9p. Barclays dropped 8p to 317.25p and Lloyds Banking Group fell 0.7p to 59.5p.

Speculation of a takeover move for Old Mutual from Standard Chartered interested traders, with shares in the financial services firm up 5% before settling 3% or 3.1p higher at 117.5p. Standard was 23p lower at 1679p.

Elsewhere in the top flight, shares in catering giant Compass were pointing in the right direction after it reported a 17% rise in first half profits and said it was hopeful of further sales growth in the second half.

It reported an acceleration in the rate of new contract wins, while 93% of existing contracts had been retained. Compass shares were 20p higher at 549.5p.

Outside the top flight, shares in ITV rallied 4% despite the Competition Commission’s decision that rules designed to protect advertisers from the broadcaster’s market dominance should stay in place.

With the watchdog agreeing that there should be a wider review of the whole system for selling TV advertising, ITV shares rose 2.55p to 60.1p.

Barratt Developments – up 6.1p to 122.6p – was another strong riser after it said it expected to report an underlying profit in the second half of its financial year.

Other housebuilders were on the front foot with Bovis Homes up 13.8p at 395.9p and Persimmon ahead 12.9p at 450p.

Logistics and transport group Stobart rose 5.1p to 155.2p after it said new contracts and an improvement in margins had boosted annual profits by 54%.