Wall Street rode to the rescue today and dispelled an early gloom surrounding the UK market.
What with continuing interest rate concerns and the bomb alert in London, the FTSE 100 index was in the red for much of the day.
But an opening rise of around 70 points on the Dow Jones Industrial Average helped London perk up, and by the close the leading index was 36.6 points higher at 6607.9.
A few companies had bucked the early downward trend, including BT. The telecoms giant added 3.5p to 332.5p after comments by chief executive Ben Verwaayen, suggesting analysts are too pessimistic about the company's future sales prospects.
"We are absolutely confident that we will do better than most people think," he told Bloomberg in an interview. "We have given all the signals to the market that we are very, very confident that we know how to grow this business."
Analysts had been expecting sales growth of around 2.5% next year.
Oil companies were also in focus as the crude price hovered around $71 a barrel.
Royal Dutch Shell, which Morgan Stanley reckons could be undervalued to the tune of a whopping $120bn, added 29p to £20.34. Credit Suisse this morning chipped in, raising its earnings forecast by 2% for 2008 and suggesting the company has around $25bn of possible disposals to come.
BP was 4p better at 603p. Days after announcing plans for a bioethanol plant in Hull with Du Pont and AB Foods, BP unveiled a biofuels joint venture with D1 Oils. The deal includes the option for BP to buy up to 16% of D1 at an average price of 251p a share. D1 added 23.75p to 264.75p.
But later news that there were problems with the CATS gas import pipeline operated by BP took some of the shine off the oil giant's shares.
Northern Rock rebounded from its recent weakness after a profit warning. It added 39p to 868p on talk of a positive note from Cazenove. Goldman Sachs also added the mortgage bank to its conviction buy list, saying: "We believe the market has overly punished it on cyclical concerns."
However the revival in property shares was shortlived as Morgan Stanley turned negative on the sector. Hammerson fell 26p to £14.34, Segro slipped 12.5p to 625p and Liberty International lost 28p to £11.45.
Drax, the owner of Europe's largest coal-fired power station, dropped 15p to 726.5p after a trading update. Analysts said there was disappointment about its future dividend payments.
"Implicit within this statement is that some of the more aggressive dividend growth expectations around the market may need to be pared back, hence the share price weakness this morning," said Jeremy Batstone-Carr at Charles Stanley. But he added: "Operationally Drax continues to trade normally, and we retain our buy recommendation."
The once reclusive but now deal hungry Mike Ashley has struck again. His Sports Direct group has made a foray into the US with the proposed acquisition of boxing brand Everlast for $168.2m including debt, topping an existing offer of $145m from US group Hidary.
Sports Direct shares fell 2p to 181.5p, compared with its 300p flotation price.
Panmure Gordon issued a sell note with a 170p target. "We don't believe a combination of a core business under pressure and a big and fast moving acquisition strategy is one that will derive shareholder value," said Panmure.
Jonathan Pritchard at Oriel Securities was scathing. "It's hardly been a wall of joy so far owning Sports Direct but the one thing that investors really feared has happened: the company is starting to venture into the States," he wrote in a sell note. "The shares may now appear to be cheap but it remains impossible to be confident in the numbers, and this will be yet another jolt to investor confidence.
"I keep thinking there will come a time to shut your eyes and buy this, and they keep giving the market a reason to keep selling."
Racecourse owner Arena Leisure also fell, down 5.25p to 64p. The company warned its 2007 profits would miss expectations after rain flooded its racecourses and the recent interest rate rises hit consumer spending. Analysts at Numis cut their recommendation from buy to hold.
Fiberweb, which makes non-woven materials for everything from nappies to train brakes, lost 10.25p to 157.75p after it issued a trading statement warning that its first-half performance would be significantly below the same time last year. In April it alerted the market to problems at its US business, and today it said it would take a £5m write off related to the American operations.
Oriel Securities said the statement made "uncomfortable reading" and cut its recommendation from reduce to sell. Dresdner Kleinwort said: "The statement gives a confusing message stating that trading is in line with previous board expectations. However as Fiberweb continues to restructure the business they appear to be uncovering more problems."
But software firm Micro Focus moved 10.75p higher to 261.75p after Cazenove and UBS both issued positive notes in the wake of its final results yesterday, which saw profits jump 166%. Cazenove moved its recommendation from in-line to outperform, while UBS upped its price target from 311p to 320p.
Also on the way up was Central African Mining which climbed 8.25p to 65.75p after Credit Suisse raised its target price from 100p to 120p. The bank's analysts visited the group's mining operations in the Democratic Republic of Congo this week, and came away impressed. Recently however the company, headed by former England cricketer Phil Edmonds, was involved in a dispute with the country's government over its corporate governance.
Among the smaller fry, air conditioning group Worthington Nicholls lost 37p to 116p after half-year results showed a £174,000 loss before interest and tax.
Carter & Carter, the support services business whose chief executive was recently killed in a helicopter crash, slumped 301p to 480p after it issued a disappointing trading statement. It did not help that the announcement came at just after 4pm and promised a conference call for analysts at 4.30pm, a time when most City workers would be looking to pack up for the weekend after their early start to the day.
Finally dealers reported interest from private punters in Aurum Mining, up 6p to 102.5p. Yesterday the company said it had identified significant savings in the forecast capital expenditure at its Andash gold and copper project in Kyrgyzstan.