Footsie adds 4.5 points

London’s leading index shrugged off a weak start on Wall Street and sluggish UK growth to close slightly higher, yesterday.

The FTSE 100 Index added 4.5 points to 5929.7 as sentiment improved near the close.

Concern about the US debt crisis unsettled Wall Street and helped the pound improve to 1.64 against the dollar. Sterling also rose to 1.31 against the euro.

Dow Jones Industrial Average was 0.5 per cent lower as US politicians remain in a bitter stalemate over raising the country’s borrowing limit.

Oil giant BP posted one of the biggest falls of the day after the company reported lower-than-expected quarterly profits and a plunge in production.

The British firm said clean replacement cost profits in the three months to June were $5.3 billion (€2.2 billion), short of City forecasts of $6 billion, while production dropped by 11 per cent. Shares fell more than two per cent or 12.2p to 463.3p.

The market was unshaken by UK economic growth figures, which revealed GDP grew at 0.2 per cent in the second quarter. The figure marked a slowdown from the previous quarter, but was in line with expectations.

However, EU debt concerns continued to trouble investors after disappointing Italian and Spanish bond auctions followed yesterday’s debt downgrade for Greece by ratings agency Moody’s.

Banks continued to come under pressure as a result. Barclays dropped 0.2p to 228.8p and Royal Bank of Scotland was down 0.1p at 36.2p, though Lloyds Banking Group rose 0.1p at 45.2p

Despite the pressure on BP, shares in BG Group shot up four per cent or 61.5p to 1486.5p after it outshone its rival with second quarter figures above market hopes.

Outside the top flight, set-top box manufacturer Pace jumped eight per cent or 8.7p to 113.7p after it reported a drop in profits but said it remained on track to meet guidance for the financial year.

The update came as a relief to investors following a profits warning in May.

Tour operator Holidaybreak jumped another 12 per cent or 44.5p to 411.5p as it revealed upmarket rival Cox & Kings had tabled a potential takeover offer for the firm.

The Mumbai-listed firm, which dates back to 1758, is in talks with Holidaybreak’s board after proposing 432.1p a share for the Cheshire-based company, valuing the business at just over £300 million.

Elsewhere, Cranswick, a major supplier of pork to UK supermarkets, saw shares tumble 15 per cent after it warned its annual profits would be lower than expected as it battles with soaring pig-feed prices.

Cranswick, which supplies pig products for the Jamie Oliver brand as well as Sainsbury’s and Tesco, said it no longer expected to hit its full-year pre-tax profit estimate, but did not offer a specific figure. Shares dropped 110.5p at 629p.

The biggest Footsie risers were BG up 61.5p at 1486.5p, Vodafone ahead 3p at 165p, ENRC up 10.5p at 791.5p and IMI ahead 13p at 1099p.

The biggest Footsie fallers were Arm Holdings down 20.5p at 595.5p, Burberry off 51p at 1549p, GKN down 7.2p at 231p and Man Group off 6.2p at 233.9p.