Oil stocks push Footsie higher

Surging oil and mining stocks put some gloss on an otherwise lacklustre session for the London market today.

Surging oil and mining stocks put some gloss on an otherwise lacklustre session for the London market today.

With the likes of BP and Cairn Energy in positive territory, the top flight managed to close 11.5 points higher at 5286.5, even though the financial, telecoms and pharmaceutical sectors all showed a sea of red.

A sharp jump in oil prices drove the hike for commodity-based stocks, as traders fretted over the possible impact of Tropical Storm Wilma on the Gulf of Mexico, which is still recovering from hurricanes Katrina and Rita.

A barrel of oil cost almost 64 US dollars in New York, encouraging investors to return to BP, which stood 16p higher at 629.5p, and Royal Dutch Shell, up 15p at 1819p. Smaller production and exploration firms benefited with BG Group ahead 8p at 492p and Cairn Energy 6p stronger at 1709p.

Mining giant BHP Billiton was also helped by the rising oil price, while higher copper prices proved an additional factor behind a gain of 12p to 817.5p. Anglo American followed BHP's lead with a rise of 35p to 1606p, while Xstrata was ahead by 20p to 1348p.

The cautious mood of the wider market was reflected in the list of fallers, which included Barclays, down 6.5p at 545.5p, and BT Group - off 2.5p at 215p.

Higher oil prices affected British Airways, which slipped 2.75p to 299.75p.

Friday's big mover, Hilton Group, was the top faller, slipping back 6.75p to 338.75p as investors engaged in an element of profits-taking after a 13% rise at the end of last week. That followed speculation that US-based Hilton Hotels Corporation was willing to pay £3.6 billion for the UK firm's hotels.

While corporate developments were thin on the ground, Rentokil Initial shares were 2p higher at 154.75p after former Granada boss Sir Gerry Robinson kept up his attempts to become chairman of the conglomerate.

And software group Sage jumped 4% late in the session after benefiting from a positive broker note. Shares were 8.5p higher at 226.5p.

Elsewhere, music publisher EMI lost 1p to 223.25p, even though it said half-year profits would be in line with expectations.

Analysts appeared to take note of guidance from EMI that the market for its recorded music division had been weaker than expected.

Outside the top flight, Classic FM owner GCap Media caused excitement amid reports that European buyout specialist Cinven could be about to launch a £700 million bid for the company, just five months after it was formed. Shares in GCap price jumped 23p to 331.25p today.

And shares in UK gas and water utility East Surrey were up 9% or 45p to 531.75p after regulators insisted that a £453 million takeover by private equity firm Terra Firma should go ahead.

The biggest Footsie risers were Sage up 8.5p at 226.5p, BP ahead 16p at 629.5p, Anglo American up 35p at 1606p and Cable & Wireless ahead 2.25p at 113p.

The biggest fallers were Hilton Group down 6.75p at 338.75p, United Utilities off 9.5p at 619.5p, Legal & General down 1.5p at 105.75p and Compass Group off 2.75p at 196p.

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