Footsie up on rising oil prices

Sky high oil prices fuelled a positive session on the London market today, as a series of energy stocks racked up gains.

With the cost of a barrel of light crude hovering just below 64 US dollars in New York, oil giant Royal Dutch Shell added around 2% to its market value and BP rose more than 1%.

This contributed to the Footsie climbing 19.4 points to 5363.7, its highest close in three-and-a-half years. The top flight has made considerable progress in recent weeks, now standing 300 points higher than at the end of June.

An upbeat performance across the Atlantic also boosted shares. The Dow Jones Industrial Average stood around 70 points higher by closing time in London.

Shell and BP – which make up around 20% of the top flight index – increased 41p and 9.5p to 1909p and 659p respectively.

But they were beaten to the top of the blue-chip risers board by gas group BG, which added 3% or 15p to 514.5p.

Oil dependent stock British Airways made progress despite the prospect of the oil price rise leading to higher fuel bills. Its stock advanced 2.5p to 288.5p.

Banking group Standard Chartered also made solid gains, up 29p to 1240p, as investors continued to cheer yesterday’s upbeat half-year results.

Mining stocks also contributed to the positive mood after Australia said it had agreed a deal that paved the way for uranium exports to China.

The move was seen as a positive development for Xstrata, which rose 24p to 1275p, while Rio Tinto added 28p to 2048p and BHP Billiton lifted 11.5p to 851.5p.

In contrast, water group Severn Trent was the heaviest Footsie faller as it went ex-dividend, meaning new investors are not entitled to a payout. The stock retreated more than 2% or 24p to 956p, while Kelda weakened 12p to 676.5p as it also went ex-dividend.

Other stocks failed to inspire the market with strong-looking half-year results.

Brewer Scottish & Newcastle fell 9p to 458.75p, even though it bucked the downward trend in the UK market and said pre-tax profits were in line with expectations at £163 million, up 8.7% on a year ago.

Mortgage bank Bradford & Bingley also fell, despite an 8% rise in underlying profits and comments that it believed the low point for the housing market may have passed. Shares were off nearly 4% or 12p at 325.75p, making it the heaviest FTSE 250 faller.

Among others reporting today, printing group St Ives cheered 4p to 380p after saying recent trading across the group had been in line with hopes.

The highest Footsie risers today were BG Group up 15p to 514.5p, Imperial Tobacco rising 39p to 1485p, Standard Chartered up 29p to 1240p and Royal Dutch Shell rising 41p to 1909p.

The heaviest fallers were Severn Trent off 24p to 956p, Scottish & Newcastle down 9p to 458.75p, Kelda off 12p to 676.5p and Wolseley down 15p to 1154p.