Oil prices work in FTSE's favour

A rise in the price of oil helped the FTSE 100 Index end its recent downward spell today as investors piled back into energy stocks.

A rise in the price of oil helped the FTSE 100 Index end its recent downward spell today as investors piled back into energy stocks.

The Footsie cheered 34.3 points to stand at 5304.6 by mid-morning – leaving it on track for a positive end to the week after six straight sessions of losses.

Oil heavyweights BP and Royal Dutch Shell contributed to the improvement as they benefited from the price of a barrel of crude oil moving back above the $64 mark.

Both featured among the highest top flight risers, with Shell advancing 28p to 1868p and BP 9p ahead at 633p.

They were joined on the way up by a string of mining stocks including Rio Tinto, rising 33p to 2011p, BHP Billiton up 12.5p to 819p and Xstrata, adding 15p to 1293p.

Advertising giant WPP added to the upbeat mood after stockbroker Cazenove upgraded the stock ahead of its first half results due next week.

The broker said it saw potential for stronger margin improvement, helping shares rise more than 1% or 7.5p to 604.5p.

In contrast, drugs group Shire Pharmaceuticals lost sight of yesterday’s considerable progress.

Analysts said news that it was in preliminary talks with Barr Pharmaceuticals to try to reach agreement on legal action over its hyperactivity drug was no surprise. Shares fell 8p to 673p.

On a quiet day for corporate news, much of the focus was on the lower tiers.

Electrical engineering firm T Clarke was in the doldrums after saying it has experienced a significant squeeze on profit margins as main contractors on projects looked to share the burden of tight cost controls.

It weakened 4% or 11p to 271.5p despite adding that the “considerable pressure” affecting its margins would start to ease.

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