Resurgent oil puts FTSE on front foot

The London market was on the front foot today after market heavyweights BP and Royal Dutch Shell improved on the back of resurgent oil prices.

The London market was on the front foot today after market heavyweights BP and Royal Dutch Shell improved on the back of resurgent oil prices.

Oil slipped below 60 US dollars a barrel this week, but was up 2 US dollars overnight as traders speculated that OPEC may be tempted to cut output.

The later price rise was positive for BP, which cheered 10.5p to 589.5p, while Royal Dutch Shell gained 27p to 1816p. It proved sufficient to ensure the FTSE 100 Index extended its recent improvement, with the top flight ahead by 36.5 points at 5966.6 by lunchtime.

Other moves saw BG Group lift 15.5p to 659p, while away from the energy sector Hanson gained 27.5p to 748.5p, as bid speculation returned to the stock.

Topping the biggest risers board was Royal & Sun Alliance – up 5.5p to 150p - after the general insurer ended its exposure to the US market with a deal to sell the American business to management. The region has been a problem for R&SA after sustaining heavy underwriting losses prior to 2003.

The More Than owner was followed by logistics group Brambles, which attracted investor interest following bid speculation. Shares were up by 17p to 485p.

British Airways was initially impacted by the hike in the price of oil but it later recovered to gain half a penny to 432.5p.

Outside the top flight, Gcap Media rose 3% after the radio group said trading had improved in September and October, following a difficult summer. The stock lifted 5.75p to 198.75p.

And HMV found itself in positive territory – up 4.75p to 163.75p – as the music and bookshop owner pointed to signs of improvement. The retailer has failed to keep pace with online rivals, but said today sales growth at its website had accelerated by 150% in recent weeks.

Meanwhile transport group National Express rallied 34.5p to 959.5p after unveiling a 16% boost in profits as an increase in passengers on road and rail helped fight rising fuel bills.

The company said underlying pre-tax profits hit £67.2 million for the six months to June 30, compared with £58.1 million during the same period last year.

However, bookmaker William Hill fell 4p to 640p after it stopped taking casino and poker bets from US customers amid confusion over internet gambling laws there.

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