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London stocks close with modest gains

LONDON: Equities ended another sluggish session marginally higher after trading in a narrow range throughout the day. Trading volumes were thin due to the summer holiday season, dealers said.

The FTSE 100, which traded in a 15-point range on Wednesday, was confined to a range of just six points today, ending 5.5 points higher at 3,470.6.

The September FTSE futures contract was up 5.0 points at 3,487.0.

The FTSE's high of 3,471.8 was reached shortly after the release of UK inflation numbers that raised market hopes that interest rates here will remain steady over the near term.

The inflation news, although well received, failed to spark a sharp rally as many participants were still away on holiday, dealers said. The FTSE drifted during the afternoon session. A weak start on Wall Street had little if any impact.

Pearson ended 11p lower at 622p ahead of first-half figures, due out on Friday. The media group said it intended to offer for sale a substantial part of its minority stake in satellite broadcaster BSkyB.

BSkyB finished 2-1/2p higher at 345p after reporting in-line full-year pre-tax profits of 155.3 million stg.

Elsewhere, Glaxo dipped 3p to 762p following a study which concluded that early treatment with its drug AZT failed to fight off AIDS. Water stocks finished mostly higher after Southern said it would seek shareholder approval to buy back its own shares.

The Southern move follows Anglian Water's purchase of 10 percent of its own shares on Wednesday.

Southern Water rose 10p to 688p, Thames Water 9p to 539p, Severn Trent 8p to 631p, Welsh Water 7-1/2p to 777p, and North West Water 5p to 635p.

P&O advanced 12p to 565p after broker SBC Warburg flagged the stock as as "trading buy". nL17342759

Technical analysts expect the FTSE 100 to remain trapped in a range of 3,448 to 3,480 in the near-term. Only a break above 3,480 resistance will allow the FTSE to test its all-time closing high of 3,520.3, they said.-Reuter