Footsie regains momentum

The London market looked set to avoid its third consecutive session of losses today as gains by oil firms boosted momentum.

Sky high oil costs helped both Cairn Energy and BP advance more than 1% and added to progress by the likes of Corus and Friends Provident.

By lunchtime, the FTSE 100 Index stood 18.4 points higher at 4940.5 – clawing back ground lost in the last couple of days but still around 40 points below Monday’s starting point.

Cairn Energy was the fourth highest riser as the price of a barrel of US light crude stayed above the 56 US dollars level. Rival BP added 8.5p to 567p while Shell gained 2p to 484.5p.

Geoff Langham, head of trading at deal4free.com, said the high oil price was undoubtedly raising concern amongst investors in the wider market but added: “The consensus does seem to be that it won’t impact consumer spending too much.”

London’s rise contrasted with last night’s performance by the Dow Jones Industrial Average, which eased seven points. General Motors again led the decline amid concern the world’s largest car maker may cut its quarterly dividend.

Experts were tipping the Dow to open slightly higher today.

Steel group Corus was leading the fight back in London. A broker upgrade left the firm at the top of the FTSE 100 risers – up 4% or 2p to 58p – reversing losses after yesterday’s results.

Friends Provident advanced 1% or 2.5p to 176.5p after unveiling a 29% boost in profits and saying recent deals would speed up growth in “the next two years and beyond”.

However, supermarket group Morrisons was moving in the opposite direction as investors continued to react to yesterday’s profits warning. The stock lost another 2%, down 4.75p to 201.75p.

Outside the top flight, specialist lender Cattles saw its shares fall 8% after it warned new accounting rules would have slashed its profits had they been in force. Shares dropped 27.25p to 349.75p.

And leather producer Pittards weakened 11% or 3p to 24.5p as it warned that trading conditions in its markets were still tough and were not expected to recover before the second quarter of its new financial year.

Support services group Serco rose half a penny to 242.5p after saying it was set to win a £1.2 billion deal to modernise hospitals in the Midlands.