Nervous gains for London market

The London market made nervous gains today as hopes that the US would announce more stimulus measures were countered by more weak economic data.

The FTSE 100 Index closed 34.1 points higher at 5129.4 as traders were buoyed by hopes that Federal Reserve chairman Ben Bernanke would announce more quantitative easing on Friday to boost the US economy.

The London market had been up nearly 100 points in early trading but it lost much of its earlier gains after more disappointing housing and manufacturing data from the US.

After an uncertain start, the Dow Jones Industrial Average in the US had gained more than 1% by the time the London market closed.

The pound was up at 1.65 against the dollar after the greenback fell on international currency markets. Sterling was flat at 1.15 against the euro.

Banking stocks, which have taken a battering in recent days, made slight gains. Royal Bank of Scotland was up 0.3p at 20p, Lloyds Banking Group was up 0.7p at 28.3p, and HSBC was ahead 1.1p at 512.1p. However, Barclays was down 0.8p at 145.5p.

Mining companies had been among the best performers in earlier trading as they benefited from a rise in base metal prices.

But they lost their gains as metal prices softened in later trading. Silver miner Fresnillo was the biggest faller, down 147p at 1892p.

However, commodities giant Glencore International was still among the best performers ahead of its interim results on Thursday. It lifted 12.5p to 367.5p.

Gold fell from its recent record high of 1912 US dollars an ounce, to 1863 US dollars, causing miner Randgold Resources to slide 230p to 6640p.

Brent crude oil prices, meanwhile, rose to around 109 US dollars a barrel as traders scaled back expectations that Libyan oil would be quickly restored, particularly as Muammar Gaddafi’s whereabouts remained unknown.

In corporate news, security firm G4S saw its shares rise 9% after it posted a 5% rise in first-half profits and said growth opportunities were accelerating in most of its markets.

The biggest employer in the FTSE 100 Index, which also hiked its dividend by 8%, saw its share price rise 20.8p to 264.4p.

Meanwhile, shares in housebuilder Persimmon were 3% or 12.9p higher at 396p after it reported a 52% jump in half-year profits to £59.7 million and increased its interim dividend by a third to 4p a share.

Mining firm UK Coal was also on the front foot, up 0.5p to 39p, after posting its first profit in four years, although its chairman said the company still faced a challenging financial position.

The biggest Footsie risers were G4S up 20.8p at 264.4p, Wood Group ahead 24p at 542.5p, Arm Holdings up 22p at 514p, and Glencore ahead 12.5p at 367.5p.

The biggest Footsie fallers were Fresnillo down 147p at 1892p, Randgold Resources off 230p at 6640p, International Consolidated Airlines Group off 3.5p at 164p, and Legal & General down 1.6p at 95.5p.