London shares shrugged off a sharp fall by their US counterparts on Monday and nudged higher, led by British Airways in a sign investors are keen to turn their backs on a dismal 2001.
The FTSE 100 leading index was last up 32 points, or 0.6 per cent, at 5,249.0, today. The blue chip index dipped to an early low of 5,195.2 points following a 115-point fall by the Dow Jones industrial average on Monday, but dealers said the absence of significant institutional selling so soon after the holiday period allowed the market to recover.
"People have come back in and they're going to take a few days to get their heads around things, but most forecasts for the year seem to be quite positive," one dealer said. He said trading had remained light.
Tempering early activity were concerns about the impact of an escalation in the military crisis in India-Pakistan, ongoing economic uncertainty in Argentina and the introduction of the euro in Europe.
But British Airways shares climbed 2.6 per cent after US carriers improved on Monday.
Media stocks, which also had a bad 2001, were in favour, with EMI and Reuters both up over two per cent.
Banks were mixed as worries about financial stability in Argentina and elsewhere in Latin America lingered, although Alliance & Leicester continued to benefit from speculation it could be a takeover target for Abbey National or another bank, and its shares rose two per cent.
A steady start to the year by the heavyweight pharmaceuticals and telecoms sectors added to the firm tone.