BSkyB optimism lifts FTSE back into positive territory

Investors breathed a sigh of relief as Ofcom's ruling did not include movie content, even though it said BSkyB must cut wholesale prices for Premier League coverage.

BSkyB secured its place at the head of the risers board, with the wider FTSE 100 Index also closing in positive territory, up 7.32 points at 5679.64.

The Footsie had earlier drifted lower as weak jobs data from United States payrolls firm ADP fuelled fears over closely-watched non-farm payrolls figures due tomorrow.

The Dow Jones Industrial Average on Wall Street fell around 20 points soon after opening.

In currency news, an ongoing rally for the embattled pound saw it reach 1.52 against the dollar and hold firm at 1.12 euros.

But much of the focus was on BSkyB in the Footsie after the long-awaited Ofcom decision, which left shares three per cent higher, up 20p to 602p.

Declines in the top flight were led by property firm Segro, which lost 9.3p to 319.6p after turning ex-dividend.

The FTSE 250 Index was also in the spotlight yesterday following a clutch of trading updates covering the financial year to the end of March.

There was also interest in shares in asset management house Gartmore after Tuesday's shock news of the suspension of one of its star fund managers.

Shares plummeted 31 per cent on Tuesday and opened down more than 10 per cent yesterday before making a recovery, up eight per cent, or 9p, to stand at 125p.

A number of other second tier stocks were under pressure, including transport firm Firs Group after it revealed that snow disruption in the UK and United States had delivered a 16m blow to operating profits. While progress elsewhere in the business meant it still expected to achieve a result in line with hopes, shares in the company dropped four per cent or 15.6p to 359p.

Enterprise Inns was also a heavy faller in the FTSE 250 Index, off eight per cent or 9.9p to 120p, as a brief trading update fuelled fears that it was still awaiting an improvement in fortunes.

The statement contained no trading figures, but included a line that it is spending more than last year supporting struggling landlords.

Northern Foods was also under pressure, even though the Fox's biscuits and Goodfella's pizza firm said it expected profits to meet City forecasts.

Shares opened higher but were later down 1.8p to close at 58.2p as investors reflected on the company's admission that profits at its ready meals business were under pressure due to investment costs and tough trading conditions.

Scalextric and Airfix firm Hornby offered some good news after it reported an encouraging trend in orders from retail customers. Shares rallied 12.3p to 126.3p following the update.

It is hoping for a sales surge for Airfix kits this year as it builds on the success of new models it is offering.

The company said: "We are now seeing a strong recovery – our retail customers are more confident about the future and both serious new enquiries and firm orders are growing."

Numis analyst Andrew Wade said: "The business has experienced an extremely encouraging start to the new year and, with an impressive product pipeline to come, we remain positive."

The biggest Footsie risers were BSkyB, which was up 20p at 602p, Lloyds Banking Group ahead 1.41p to 62.77p, Randgold Resources up 101p to 5015p and Cable & Wireless Worldwide ahead 1.7p at 92p.