LONDON'S benchmark FTSE 100 Index moved closer to the 4000 barrier after taking a positive lead from trading in New York.

Blue-chip shares were initially driven higher by overnight gains across the Atlantic and eventually ended the day ahead by 67.4 points at 3916.8.

Dealers said much of the progress on both sides of the Atlantic was down to investors turning back to shares rather than the gold and bonds that provided a safe haven during war in Iraq.

Wall Street shares, which have benefited from a series of positive corporate updates in recent sessions, appeared set for another upward lift.

By the time London dealing closed for the day, the Dow Jones Industrial Average was ahead by more than 40 points.

In the City, inflation figures provided no surprises with the underlying rate of inflation steady at three per cent in March.

Enjoying the upbeat day was pubs and restaurants group and Footsie newcomer Mitchells & Butlers, which gained 5p to 222p on its market debut after being spun off from leisure group SixContinents.

But former stablemate InterContinental Hotels topped the fallers board, down 14p at 372p on its first day of trading.

Despite the positive session, supermarket group Safeway lost early gains to finish down 2p at 261p after flat fourth quarter like-for-like sales figures had allayed fears in the City of a far greater trading slump.

Elsewhere Norwich Union owner Aviva topped the Footsie risers board with a 31p gain to 424p. Prudential was close behind with a 20p lift to 376p and Legal & General up 4p at 79p.

Outside the top flight, supermarket group Somerfield led the FTSE 250 Index with a 23 per cent or 17p gain to 91p following confirmation of a possible offer for the group.

Analysts said Icelandic retailer Baugur, which already has a three per cent stake in the company, was a possible bidder for Somerfield.

And engineering group Invensys was making progress after detailing plans to sell off a further clutch of businesses. Shares rallied 14 per cent, or 1p, to 14p.