Shares shrug off Portugal debt fears

COULD Portugal be the new Greece? That was the question weighing on traders' minds yesterday after credit ratings agency Fitch downgraded the status of Portuguese sovereign debt following budget concerns.

Worries over Europe's growing sovereign debt burden propelled the dollar to ten-month highs against the euro and pushed the pound below the $1.50 mark.

Yet the UK's top share index shrugged off the concerns to post modest gains as strength in miners and banks was balanced out by weakness in energy stocks, with little overall impact from a Budget that contained few surprises.

At the close, the FTSE 100 was up 4.25 points at 5,677.88, having hit a fresh 21-month intra-day peak at 5,698.87 early in the session.

Weakness among energy companies' shares was one of the main curbs on sentiment, with the sector retreating after good gains in Tuesday's session as crude fell below $81 a barrel.

The fall in the oil price weighed heavily on shares in Edinburgh-based oil and gas outfit Melrose Resources. Shares closed down 5 per cent, or 16p, at 304p despite Melrose posting what analysts Brewin Dolphin described as "a solid set of results".

Travel firms surrendered early gains after TUI Travel – which owns Thomson Holidays – said demand for holidays was continuing to improve strongly.

TUI edged 3p down to 301.2p as shares took a breather after strong recent gains, but fellow tour operator Thomas Cook crawled 0.3p ahead to 256.1p, having led the Footsie early on.

Hedge fund giant Man was a prominent riser, adding 2 per cent, or 4p, to end the day at 246.7p despite a further fall in assets under management.

Investors took heart from a better recent performance by its AHL fund and its decision to keep the dividend unchanged.

Industrial engineering firm Smiths also gained after the firm lifted interim profits 7 per cent despite flat sales and said it was "well placed" for the rest of the year. Shares added 17p to 1,156p.

But fourth-quarter figures from supermarket Sainsbury's failed to add momentum to its shares, which lost 0.5p to 327.6p as it confirmed expectations for a slowdown in sales, up only 1.7 per cent in the 11 weeks to 30 March.

Top-flight fallers included life and pensions giant Aviva and InterContinental Hotels – down 17.7p to 383.9p and 21p to 1,019p respectively – after the stocks turned ex-dividend, meaning shareholders will no longer be entitled to the latest payout.

Pubs group Mitchells & Butlers – which owns the All Bar One chain – gained 4 per cent, or 10.9p, to 302p in the FTSE 250 after the firm announced a strategic review which will see it concentrate on growing its food business.

Low-cost carrier EasyJet meanwhile confirmed that Guardian Media Group chief executive Carolyn McCall is to become its new boss. Shares in the airline were down 4.6p to 448.9p.

SuperGroup, which owns the Cult and SuperDry clothing chains, made its stock market debut, opening at 500p and closing at 540p.

Meanwhile, Scotgold – the latest company from north of the Border to float – closed down 0.38p at 6p, having launched at 4.9p on 24 February.

Commodity prices fell as the dollar gained ground against the euro and pound, with gold at a six-week low.