FTSE boosted by utility firms

Utility firms lifted the FTSE 100 Index back into positive territory today after the UK regulator Ofwat allowed them to raise water bills by more than originally proposed.

Shares in a string of water firms surged after the news, lifting the Footsie 21.6 points higher to 4757.3 by mid-morning despite a sharp drop in oil stocks.

United Utilities was the biggest climber, moving nearly 5% higher or 27.5p to 599p. Fellow blue-chip company Severn Trent gained 28.5p to 933p.

This helped offset a significant drop by oil companies after the cost of crude saw its heaviest fall in a single session since 2001.

Diminishing fears of a supply crunch over winter pushed the cost of a barrel of light, sweet crude oil down from $49 to $45.47.

Oil giant BP slumped 14p to 518p and rival Shell eased 4.25p to 436.5p. Cairn Energy also fell 41p to 1483p while gas group BG was off 5.75p at 356p.

The mood in the rest of the market was more positive with a number of stocks with exposure to high oil prices on the way up. They included British Airways, which gained 6.25p to 232.25p.