FTSE extends gains

The London market extended its gains today as investors in oil giants rejoiced at the rising price of crude.

The FTSE 100 Index lifted further above the 5300 barrier to stand 36.6 points higher at 5306.9 by mid-morning.

The second explosion in five months at BP’s Texas City refinery in the United States failed to affect its share price as investors focused on the prospect of higher prices from potential supply shortages.

BP rose 5p to 635.5p as the price of a barrel of US light crude lifted 34 US cents to 60.28 dollars in futures trading.

Royal Dutch Shell’s B shares – the most commonly held in the UK – offset losses following yesterday's disappointing half-year results, lifting 55p to 1814p. Together, RDS and BP account for about 20% of the value of the Footsie.

The mood in the banking sector was more subdued, despite a 7% rise in half-year profits at Lloyds TSB.

The performance by the bank was in line with expectations but overshadowed by a higher-than-forecast rise in bad debt levels. That pushed shares nearly 2% or 7.75p lower at 481.25p.

Lloyds was followed lower by Halifax Bank of Scotland, which fell 8.5p at 866.5p, and Royal Bank of Scotland, off 12p at 1693p. The only beneficiary in the sector was Northern Rock, up 0.5p at 822.5p.

Friends Provident was another casualty, off 2.75p at 183.25p, as a trading statement caused analysts to fret over margins achieved on new business.

Yesterday’s highest riser, Rolls-Royce, declined more than 1% or 4.5p to 337.5p as investors took profits after it revealed record order books and another rise in half year profits.

But another company that reported good results yesterday, cigarette group BAT, saw its shares rise 33p to 1129p after broker UBS upgraded its recommendation on the stock to buy from neutral and raised its target price to 1250p from 1025p.