Footsie edges back after an early drift

THE Footsie edged ahead yesterday having earlier drifted as weak jobs data from the US fuelled fears over closely-watched non-farm payroll figures, due tomorrow.

The Dow Jones Industrial Average on Wall Street fell by about 20 points soon after opening but the FTSE 100 ended the day up 7.32 points at 5,679.64.

Weak data from US payroll firm ADP showed that employers shed 23,000 jobs, missing a forecast increase and prompting a slight dip in mid-session trade in London. But the fall was muted, with investors relatively confident on the economic outlook.

Steven Bell, director of hedge fund GLC, said: "The move was muted and for good reason, the bigger picture is that the US economy is stronger and economies elsewhere are recovering. We are in a strong cyclical recovery."

In currency news, an ongoing rally for the embattled pound saw it reach $1.52 against the dollar and hold firm at 1.12.

Much of the focus in London was on BSkyB after the long-awaited Ofcom decision on charges for premium sports, which left shares 3 per cent higher, up 20p at 602p, and BSkyB at the top of the leaders' board.

Declines in the top flight were led by property company Segro, which lost 9.3p to 319.6p after turning ex-dividend. The FTSE 250 Index was also in the spotlight following a clutch of trading updates covering the financial year to the end of March.

There was interest in shares in asset management house Gartmore after the shock news of the suspension of one of its star hedge fund managers.

Shares in the firm had plummeted 31 per cent on Tuesday following the announcement and opened down more than 10 per cent yesterday before making a tentative recovery, up 8 per cent or 9p to 125p.

A number of other second tier stocks were under pressure, including Aberdeen-based transport giant FirstGroup after it revealed that snow disruption in the UK and US delivered a 16 million blow to operating profits. While progress elsewhere in the business meant it still expected to achieve a result in line with hopes, shares in the company dropped 4.2 per cent or 15.6p to 359p.

Enterprise Inns was also a heavy faller in the FTSE 250 Index, off 8 per cent or 9.9p to 120p, as a brief trading update fuelled fears that it was still awaiting an improvement in fortunes. The statement contained no trading figures, but included a line that it is spending more than last year supporting struggling landlords.

Northern Foods was under pressure, even though the maker of Fox's biscuits and Goodfella's pizza said it expected profits to meet City forecasts. Its shares opened higher but were later down 1.8p to 58.2p as investors reflected on the firm's admission that profits at its ready meals business were under pressure due to tough trading.

Edinburgh-based aviation and newspaper distribution group John Menzies bought 2.3m worth of its own shares, which the company said would be used to satisfy awards under its long-term incentive plans.

On Aim, shares in digital CCTV outfit IndigoVision were brought into sharp focus with a 9.2 per cent rise to 505p after it was reported that a shopping centre in Canada had become the first in the country to install one of its systems in which all the cameras are linked by a computer network.