FTSE steadies

The FTSE 100 Index pulled out of a steep nosedive today after slumping fall below 5000 for the first time in six months.

London’s Footsie staged a late session fight back, closing down 10.2 points at 5062.9, thanks to steadier trading on the Dow Jones Industrial Average on Wall Street.

The UK benchmark index had at one stage fallen more than 2% in another session of heightened volatility on sovereign debts and growth prospects in Europe.

Investors were also unnerved after new laws to rein in Wall Street were passed in the US, which initially hit bank shares hard.

The Footsie fell below the 5000 level before US trading opened, putting it in danger of the first close below the benchmark since last October.

Lower-than-expected UK public borrowing figures for April gave little cheer although Germany approved its share of the €750bn bail-out.

But the Dow Jones started on a firmer footing after its 3.6% fall yesterday, heading for a close in positive territory.

In currency news, the pound held its ground at $1.45 and €1.15 as sentiment improved towards the end of the session thanks to news of Germany’s support for the bail out plan.

Among stocks, Banks had been among the worst impacted shares in the early session sell-off, however they clawed their way back into the black.

Royal Bank of Scotland closed up 0.43p to 45.25p and fellow taxpayer-backed player Lloyds Banking Group gained 0.9p to 55.8p.

Beleaguered airline British Airways also made an impressive bounce back after spending much of the session in the red.

It recorded pre-tax losses of £531m (€610m). While the losses were not as bad as first feared and the company expects to break even this year, it faces 15 days of strikes from Monday in a bitter union dispute.

BA shares closed up 2p at 188.5p.

Miners bounced back after steep falls earlier this week, with Xstrata up 6% or 56.8p to 950p, followed by silver miner Fresnillo, which added 35p to 850p.

Mobile phone giant Vodafone was up 0.55p to 130p on reports that it could sell its 55% stake in its Egyptian business for around £3bn (€3.4bn).

In corporate news, the London Stock Exchange gained 7p to 643p as results showed a return to profit in the year to March 31.

Elsewhere, newspaper distributor and aviation services firm John Menzies lifted 2% after upping profit expectations for the full year.

Its shares rose 5p to 353p as the group said trading had remained strong across both businesses, despite a £2.5m (€2.9m) hit from the volcanic ash cloud disruption in its aviation arm.

The biggest Footsie risers were Xstrata up 56.8p at 950p, Fresnillo up 35p at 850p, Eurasian Natural Resources up 37.5p at 972p and Antofagasta ahead 31.5p at 858.5p.

The biggest Footsie fallers were BP down 22.1p at 506.7p, Smith & Nephew off 23.5p at 614.5p, Shire down 41p at 1342p and SABMiller down 50p at 1862p.