FTSE tiptoes close to the 5500 mark

AFTER a nervy day yesterday, London's top stocks managed to inch towards the 5500 level in morning trade today, boosted by positive analyst comments on the mining sector and tracking gains on Wall Street.

Towards the end of morning trade, the index stood at about 5485, up some seven points.

Dealers said sentiment got a boost from gains in New York - where the Dow Jones ended 0.76 per cent higher - and a steadier oil price of around $66 a barrel following record highs in the wake of Hurricane Katrina.

"Obviously we want oil prices lower but the market is quite happy with that as long as it does not move all over the place," said Matt Buckland, a trader at CMC Markets.

Marks & Spencer boss Stuart Rose saw his efforts to turn around the fortunes of the ailing retailer applauded by three banking heavyweights in the City. At one stage, shares in M&S rose to 380 pence to hit their highest level for more than three years after Goldman Sachs, Credit Suisse First Boston and Lehman Brothers took a more positive stance on its prospects.

All now believe M&S shares can reach the 400p that Bhs owner Philip Green was willing to pay last year before he ditched his 9.1 billion takeover bid.

Mining stocks added to the Footsie's gain. Xstrata was up about 0.35 per cent after Dresdner Kleinwort Wasserstein raised its price targets across the sector and said it was not yet time to sell mining stocks.

Miners fell in the previous session, with dealers attributing losses to profit taking and book squaring as the third quarter comes to a close.

Oil stocks held the market back, with BP down more than one per cent and Royal Dutch Shell also falling 0.27 per cent.

Spelling out just how it plans to expand its global reach, Tesco said it had agreed to swap six stores and two sites in Taiwan for 15 of French retailer Carrefour's stores in Slovakia and the Czech Republic. Investors seemed happy, with Tesco's share price rising 0.8 per cent in the morning session.

Fund manager Man said funds under its control were estimated to be 25bn, with first-half figures expected to be in line with forecasts. Towards the end of the morning, its shares had increased by almost one per cent.

Japan's Nikkei average ended down 42.94 points at 13,574.30, but finished the first half of the business year up 16 per cent, outpacing the Dow Jones and FTSE on growing optimism about the Japanese economy.