The FTSE 100 index maintained its recent rally today as investors warmed to upbeat news in the oil and media sectors.
Cairn Energy shares bounced 5% after positive drilling results in India added to momentum generated by a rising oil price, while BP and Shell also gained ground.
Media stocks attracted investors after publisher Reed Elsevier said its markets were showing signs of improvement, helping the Footsie to rise 20.9 points to 5074.1 by mid-morning.
Analysts also found nothing controversial in comments by US Federal Reserve chairman Dr Alan Greenspan yesterday, confirming their view that interest rates will rise at a measured pace across the Atlantic.
In London, Cairn Energy rose 54p to 1120p on news that drilling in an area outside its main development site had found oil.
The news – combined with a higher oil price on fears of disruptions to supply in Iran – encouraged investors to take another look at rivals BP and Shell, which rose 8.5p and 6.25p to 563.5p and 487.25p respectively.
Reed shares rallied 7% or 33.75p to 530p after the company said it was confident of strong growth in 2005. Also on the move were Reuters, up 5p to 425p, and FT owner Pearson which strengthened 12.5p to 660.5p.
Drinks giant Diageo, which makes brands such as Guinness and Smirnoff vodka, rose 6.5p and 751.5p after a 4% rise in annual sales and a slight dip in profits met market expectations.
B&Q owner Kingfisher topped the Footsie fallers board after announcing disappointing fourth quarter sales figures for its B&Q and Castorama chains. Shares were off 5,75p at 296.5p.
Outside the top flight, Amstrad lost early gains to fall 0.5p to 183.5p even though it announced that sales had more than doubled on the back of strong demand for set-top boxes.