Investors overcame fears of rising oil prices and higher interest rates yesterday, keeping the market in positive territory.

The FTSE 100 Index posted some modest gains during the afternoon to end the day up 11.4 at 4414.4.

Analysts said further oil price rises and interest rate increases remained possible in the coming months.

Inflation figures showing a 0.1 per cent rise to 1.2 per cent prompted economists to forecast a UK interest rate rise for next month or July.

But Geoff Langham, of stockbroker deal4free.com, said: "The UK economy is expanding and can probably withstand these pressures for the time being."

The Dow Jones Industrial Average took its cue from an upbeat performance on Asian markets overnight to stand nearly 68 points ahead shortly after London's close.

Companies reporting results were dominating the risers board, with pubs group Enterprise Inns climbing 18p to 578p after announcing a 16 per cent rise in interim profits to £93.7m.

Better than expected profitability in the US and an upbeat outlook helped directories group Yell to finish the day at the top of the Footsie risers with a gain of five per cent, or 15p, to 318p.

There was a 5p gain to 534p for BAA after the airports operator posted a 4.9 per cent rise in annual operating profits and said a record number of passengers used its sites last year.

Mobile phone network mm02 finished the session unchanged despite raising the prospect of future dividend payments to shareholders.

On the downside, drinks group Diageo was top of the Footsie fallers after broker Merrill Lynch said a stock price of 725p, rather than 750p, would represent fair value. Shares fell more than two per cent, or 17p, to 737p.

Outside the top flight, biotech company Celltech was the biggest second tier climber after its directors agreed to a takeover by Belgian chemical manufacturer UCB. Shares rose nearly 26 per cent, or 111p, to 542p.

Telecoms equipment group Marconi climbed 24p to 585p after it passed a key milestone in its recovery with its first quarterly profits for three years.

The company, which needed a complex financial restructuring to stay afloat last year, surprised markets with profits of £11m in the first three months of the year.

VT Group - the shipbuilder formerly known as Vosper Thornycroft - failed to finish the day in the black despite announcing a 11 per cent rise in annual profits. Shares in VT lost earlier gains to close down p at 256p.

Shares in leisure group Rank fell four per cent after it announced its film processing business had lost a key contract. The stock slipped 14p to 299p.

Sage Group was another of the day's biggest risers, ahead 6p at 170p