THE London Stock Exchange's blue-chip index, bolstered by firm European bourses and strong gains by the heavy-weight banking sector yesterday, outperformed as Wall Street was weighed down by a profits warning from Minnesota Mining & Manufacturing and concern over the political future of President Bill Clinton.
Growing tension between the Anglo-American allies and Iraq over UN weapons inspections and Congressional impeachment moves against the US leader
provided a tense backdrop to share dealing in the City.
Official UK figures released soon after the market opened showed unemployment rising. This gave another clear sign that the economy was slowing and raised hopes of further interest rate cuts.
The benchmark FTSE-100 leading share index closed up 73.3 points at 5630.4, near its session high of 5636.8.
Junior stocks also advanced but were less well supported by investors. The FTSE-250 mid-range barometer ended 8.3 points firmer at 4689.6, while the All-Share improved by 27.75 to 2564.54.
Debt instruments ended down in light activity. March gilt futures slid 0.15 to 118.44.
The Dow was off 63 points by the London close. By contrast, Germany's Xetra DAX index gained 2.6 % and France's
CAC-40 moved 0.9% ahead.
The row over Iraq pushed up Brent crude prices and some petroleum stocks rose in concert. BP surged by 21p to 876.5p but Shell slipped by half-a-penny to 349p and Enterprise was a penny better at 303p.
An active session for the pharmaceuticals and biotechnology sectors saw a number of key players on the move.
But the shift was in the wrong direction for British Biotech, down 5.75p to 30.25p - a 15% fall.
The troubled drug development company announced it was cancelling a key set of trials for its anti-cancer drug Marimastat.
Chiroscience - up a half-penny to 231.5p - won groundbreaking regulatory approval for a new anaesthetic.
Zeneca gained 50p to 2637.5p amid hopes that a rival may step in with a bid to scupper its talks with the Swedish Astra group.
Renewed merger speculation about SmithKline Beecham and Glaxo Wellcome sparked moves for both companies shares. SmithKline improved by 14.5p to 801.5p and Glaxo added 21p at 1933p.
Shareholders in RJB Mining received a welcome bit of good news after the company announced a #1bn contract to supply coal to electricity generator PowerGen. The contract, part of a series of deals with the major electricity generators, pulled RJB up 4p to 71.5p.
The 6% gain came as some comfort for investors who have seen their stocks fall steadily from highs of 590p in April 1996.
A clutch of takeover announcements focused attention on a handful of stocks.
Chemicals company Brent International bubbled up 9.5p to 80.5p, a rise of 14% as it announced it was a takeover
target.
Few buyers called up Phonelink - down 5p to 32.5p - after it announced falling sales and interim profits.
Meanwhile, Tuesday's headline maker Newcastle United rose after revealing it had been approached by a potential buyer offering up to 110p a share.
The football club's stock failed to reach that level but did climb 3.5p to 102p.
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