FTSE fails to bank on energy surge

Britain's benchmark FTSE 100 share index closed lower yesterday as weaker banks outweighed gains from energy and mining stocks but that did not prevent it enjoying its best September for 13 years.

The Footsie, which has added about 6.7 per cent over the month, dipped in and out of the red throughout the day and finally closed just over 20 points down at 5,548.62.

Stock market historian David Schwartz said it was the best September since 1997, when the index of Britain's biggest listed companies climbed 7 per cent during the month.

Yesterday's closing value also meant that the Footsie enjoyed a 12.8 per cent gain in the third quarter.

Anthony Grech, head of research at IG Index, said: "Traders seem keen to have sought out the positive in recent days but the US non-farm payrolls next Friday will loom for many and it's borderline as to whether we'll see a positive number printed here." The trading day started with concerning European news, as rating agency Moody's downgrading Spain to Aa1, while the Irish government said the total cost of bailing out Anglo Irish Bank was €34 billion (29bn).

But improved US data lifted the mood later in the day, with the final second-quarter GDP revision coming in slightly better than expected at 1.7 per cent, while weekly jobless claims fell to 453,000 from 465,000 the previous week.

Wall Street opened higher on the final day of what is expected to be the best September in 71 years for US markets.

Fears over the European debt crisis hit the banking sector, with Barclays down 5.6p to 299.6p, HSBC off 4p at 645p and Royal Bank of Scotland 0.68p lower at 47.21p.

With the dollar under pressure amid concerns that the US Federal Reserve will reopen its quantitative easing programme, the price of gold set a new high above $1,300 an ounce as investors continued to see the precious metal as a safe haven.

Mining stocks were cheered as Lonmin added 2p to 1,669p and Eurasian Natural Resources lifted 14.5p to 918.5p.

The oil and gas sector helped push the market up earlier in the day with BP leading the charge and Royal Dutch Shell not far behind. Shares were up 6.8p at 427.8p and 5.5p at 1,916p respectively.

BP leapt ahead after Wednesday's move by new chief executive Bob Dudley to set up a safety division as part of efforts to rebuild the company's shattered reputation following the Gulf of Mexico disaster. The new boss also hinted in an interview that dividend payments to shareholders could be restored in the new year.

On the downside, shares in catering giant Compass dropped 21p to 530.5p, making it the top flight's biggest faller, despite another solid sales performance in the fourth quarter.

Outside the top flight, Dairy Crest rose 2 per cent after it said increased profits in its cheese business underpinned growth at a time of intense competition in the milk supply market.The stock, which added 8.2p to 380.5p, was also higher on Wednesday after announcing a new five-year supply contract with supermarket chain Morrisons.