Blue-chips recover from uneasy start

 

A Fresh batch of healthy economic data helped London's equity market recover from an uneasy start to finish the session in good form yesterday.

The average earnings news, plus an unexpected rally on Wall Street after a weak opening, saw the FTSE 100 index, London's benchmark, finish the day well clear of 5,000 and post a closing gain of 48.3 at 5,038.4.

Wall Street picked up strongly yesterday after a poor opening, with the Dow Jones Industrial Average recording a 60-point advance and testing the 8,000 level as it did so.

There was also some confidence-boosting corporate news, with Smiths Industries announcing interim profits in excess of the market's most optimistic forecasts, triggering a general upsurge in the share prices of the leading aerospace, defence and engineering stocks.

Many of those stocks featured among the FTSE 100's best individual performers.

Although left behind by the late upsurge in the leaders, the second-line stocks and small-cap issues also managed to record modest gains, overcoming an early bout of nerves.

The FTSE 250 settled 16.6 ahead at 4,406.3, extending its gains to a fourth consecutive session, a period during which the index has risen 155.1 or 3.6 per cent.

The FTSE SmallCap, meanwhile, was finally 3.3 firmer at 1,849.4.

Earlier, the market had struggled in the face of persistent selling pressure, prompted mainly by the overnight slide on Wall Street. At its worst the FTSE 100 index was down 54.4 and looked like testing the 4,900 level.

But news of a slightly smaller-than-expected 4.6 per cent increase in average earnings in July provided further encouragement to market participants.