Late rally fails to turn FTSE positive

A LATE surge in London last night failed to wipe out all of the earlier losses caused by a fall on Wall Street.

The FTSE 100 closed down 4.83 points at 5,547.08, having fallen as low as 5,471.69 during yesterday's session.

On Wall Street, the Dow Jones Industrial Average opened lower after figures revealed first-time claims for unemployment benefits rose last week in the United States.

But the Dow rebounded after a recovery in American homes sales during August, giving the Footsie a late boost.

The turnaround wasn't enough to eliminate all of the day's losses, with the index closing down for the third session in a row, having hit its highest close since late April on Monday. Phil Gillette, a senior trader at Spreadex, said: "If you look at the charts, it does still look like it is forming an upward channel, so whether this is a little blip with the market wearing bad days for a while… but generally it looks well supported, although low volumes remain a concern."

Uncertainty over the global economic recovery was fuelled by signs earlier this week that policymakers at the Bank of England and US Federal Reserve have moved closer to taking additional support measures, such as more quantitative easing.

But the pound found strength across the board yesterday after a mixed week so far, with sterling up at $1.57 and €1.18.

Investor confidence was reflected in a shortened risers board, with miners among those in the black.

Randgold Resources made gains as it continued to benefit from the elevated price in gold, which remained near a record high at $1,300 an ounce. Shares were up 70p at 6,560p.

BAE Systems was up 4.3p to 337.1p after the company announced it had won significant new business in the commercial aviation market, including a multi-million pound five-year support deal with Ireland's CityJet to cover its 27-strong Avro RJ85 regional jet fleet.

Fallers included stocks in the banking sector, with Lloyds Banking Group off 0.8p to 75.1p and Standard Chartered 12p lower at 1,862p ahead of more details due today on the UK government's inquiry into whether to break up the banks.

Shares in British Airways lost earlier gains, seen after the Spanish airline Iberia approved BA's plan to deal with a 3.7 billion pension deficit.

Iberia had the right to pull out of a merger between the two airlines if it thought the outcome of discussions between BA and its pension trustees could damage the value of the deal. Shares were 0.3p lower at 239.7p.

Outside the top flight, pubs chain Mitchells & Butlers improved 5.3p to 300p after its food-led trading strategy helped produce a 3.6 per cent rise in like-for-like sales in the nine weeks to 18 September.

Nightclub operator Luminar suffered another share price slump after revealing sales were down by 20 per cent over the summer.Trading has suffered due to the impact of youth unemployment and the distraction of the World Cup, but the firm said it continued to trade within its banking agreements.

This failed to satisfy investors as shares fell 2p to 13.5p, having lost more than 90 per cent of their value in the past year.