Record results from BP ensured the FTSE 100 Index kept the landmark 5000 barrier within its sights today.
Shares in the UK’s largest company rose 1% after it announced profits of 16.2 billion US dollars (£8.7 billion), adding to the rosy glow around the sector generated by Shell last week.
By lunchtime, the Footsie was ahead by 8.8 points at 4988.6, although this was only half the progress it made earlier in the session.
Jimmy Yates, of deal4free.com, said: “Without doubt 5000 on the FTSE is now within striking distance and psychologically this could prove to be a difficult level to break.”
Lingering concerns over the budget proposals from President Bush in the US could limit progress by the Dow Jones Industrial Average today, with analysts expecting it to open around the break-even mark.
In London, BP advanced 3.5p to 547.5p after the soaring oil price lifted its results performance and Cairn Energy was up 19p at 1154p. Rival Shell, which last week unveiled even bigger profits, moved in the opposite direction with a 1.25p fall to 483.25p.
But the biggest gains came from the hotel sector after broker UBS issued a positive note on Hilton.
Hilton was at the top of the Footsie risers board with a rise of 7.75p to 312.5p, while rival InterContinental Hotels cheered 12.5p to 694.5p.
Favourable broker comments were also stoking interest in the tobacco sector, with Dresdner Kleinwort Wasserstein now urging investors to buy shares in BAT, which rose 15p to 987.5p. Silk Cut owner Gallaher and Imperial Tobacco also improved, up 14,5p and 16p to 827p and 1454p respectively.
In contrast, sugar group Tate & Lyle was the third heaviest faller despite unveiling a deal to supply its sweetener to Diet Coke. Shares rose 7% yesterday but fell back 1% on today’s announcement, off 6p to 495p as the firm said the move would not materially affect short-term earnings.
Outside the top flight, gaming group Wembley cheered nearly 8%, up 56p to 797p, after agreeing to offload its division in the United States.
Tool rental company Brandon Hire added half a penny to 169p as it unveiled record annual sales and profits after boosting the size of its business by a third.
However, telecoms equipment group Marconi was in the red as it reported a 5% lift in third-quarter sales but said margins this year would be towards the lower end of expectations. Shares fell 32.5p to 593.5p.