LEADING share prices in London finished a directionless session yesterday with a modest gain, but investors were deterred from chasing the market higher by big losses on several Far Eastern bourses, relatively expensive blue-chip stock valuations and fears that an interest rate rise - perhaps in the US - could spark a broad setback.
Oil sector stocks BP, Enterprise and Lasmo advanced on the back of rising crude prices, and supermarket operator Safeway was boosted by strong results, but Asian-linked banking shares Standard Chartered and HSBC slumped amid renewed market turmoil in the region. Both shares were among the biggest losers.
Standard Chartered ended 51.5p off at 828.5p, while HSBC plunged 61p to 1698p.
Adding to the downward pressure, leading investment bank Dresdner Kleinwort Benson repeated a ''sell'' recommendation on Standard.
By the close, the FTSE-100 benchmark share index was up 16.2 points, or 0.3 %, at 5972.9 near the middle of its recent trading range. Gainers were in a five-to-four majority.
The FTSE-250 index of second-lines crept 9.2 points higher to 5788.9, its fourth record close
in a row.
In Paris, French shares stormed ahead with the CAC-40 index ending at a record level of 4019.76 - a gain of almost 1%.
UK gilts, however, were spooked by strong wages data and June futures settled 0.07 lower at 108.07.
In the foreign exchange markets, the pound see-sawed throughout the day, ending marginally worse off against the dollar by the close.
This followed reports of billionaire financier George Soros' decision to gamble heavily on a sharp fall in sterling.
Stock brokers turned their attention to Britain's fourth biggest supermarket chain, Safeway, after it gave an upbeat trading statement on the current year.
While its profits slumped dramatically, they were in line with expectations, and the sales update took shares up 12.5p to 376p.
Elsewhere in the sector, Tesco eased 6p to 551p, Sainsbury slimmed 3.5p to 512p, and Iceland Group lost 2p to 226.5p.
Analysts said shares were down as Safeway's improvement in
sales had to be eating into rival businesses.
In the telecoms sector, Cable & Wireless, the international group, reported bullish results and gained 8.5p only to fall back over profit-taking to end half-a-penny higher
at 679.5p.
BT, down 3p to 650p, disclosed plans to spend #800m over the next five years expanding the capacity of its network to handle the Internet boom.
British Airways was given legal clearance for the launch next week of its no-frills European airline Go despite objections from rival low-cost operator easyJet. BA, however, fell half-a-penny to 565.5p.
Airtours, up 27.5p to 541p, positioned itself in the lucrative German market after buying a stake in major operator Frosch Touristik.
Meanwhile, the announcement of a Thai venture from Boots left it down 9p to 920p.
General Accident and merger partner Commercial Union both reported heavy hits from weather claims in the first quarter of the year. But a positive statement on the progress of their integration bolstered shares on a mixed day for financial stocks.
GA gained 10p to 1370p and CU improved 14p to 1090p.
Other insurers faired well, with Norwich Union up 1.5p to 440p, and Legal & General gained 8.5p to 700p.
Royal & Sun Alliance did not join the party, falling 2.5p to 666p, and Prudential dipped half-a-penny to 807.5p.
Exporters were hit by the temporary rise in sterling, with Siebe sent down by 41p to 1409p and Smiths Industries falling by
35p to 923p.
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