FTSE rises on slicker oil stocks

Rises from heavyweight oil and telecom stocks helped the London market make a strong start to the week today.

By lunchtime, the FTSE 100 Index was up 53.8 points at 4145.4, although retreating from an earlier surge to 4164.7.

Shares were boosted by a positive close on Wall Street on Friday, which was buoyed by upbeat consumer confidence figures.

Analysts believe the Dow Jones Industrial Average will edge up in early trading in New York later today, fuelling more optimism in London.

Leading the risers in the City was troubled telecoms group Cable & Wireless, which leapt 10% after it released a statement clarifying costs linked with the restructuring of its Global operation.

Shares rose 7.75p to 83.5p as the group gave a breakdown of future costs of its property leases.

Analysts said the statement reassured investors worried about increased restructuring costs.

Other risers included Vodafone, up 3.25p at 118.75p, as it continued to benefit from the positive reaction to its half-year results announcement last week. BT was also up, rising 9p to 217.25p.

Oil giants BP and Shell added weight to the market as oil prices nudged up amid renewed unrest over the situation in the Middle East.

BP gained 7p to 417p while Shell was up 5.75p at 416.75p.

Banks were also helping support the Footsie, with Lloyds TSB up 8p at 515.5p, Royal Bank of Scotland up 15p to £15.34, Barclays 12.75p ahead at 444.25p and HSBC rising 20p to 748p.

On the down side, however, steel group Corus remained under pressure after its gloomy profits warning last week.

The group, which pulled out of its Brazilian merger citing deteriorating economic conditions last Wednesday, fell 6%, or 1.5p to 25.5p.

Drinks group Diageo also slid, off 17.5p at 696p, after saying it was in talks with US private equity group Texas Pacific over “materially different” terms regarding the sale of its Burger King fast food chain.

Diageo agreed to sell the chain in July but the price was dependent on certain performance criteria.

Recently, sales at the chain have come under pressure and the pair are now renegotiating terms of the deal.

Among smaller stocks, Majestic Wine rose 2%, or 9.5p to 493.5p, after half-year profits rose from £1.6 million to £2.6 million.

Troubled travel group MyTravel also shot ahead, up 4.25p at 22.5p. The group on Friday reassured that it had seen no evidence of cancellations of holidays booked under a deferred deposit promotion.