Oil stocks underpinned progress for the London market today as takeover talk gave a helping hand to retailers.
Crude prices of around US$125 a barrel offered momentum to majors such as BP, while bid speculation surrounding B&Q owner Kingfisher gave shares a boost.
Although higher than expected factory gate price data took the shine off earlier gains as rate cut hopes took a jolt, the FTSE 100 Index eventually closed 15.9 points up at 6220.6.
Kingfisher gained 5.4p to 151.7p as rumours of interest from private equity firm Blackstone and US giant Home Depot encouraged traders.
The bid speculation helped Marks & Spencer, Next and Argos owner Home Retail Group move higher despite the tougher high street fortunes experienced by the trio in recent times.
Next rose 19p to 1309p, Marks & Spencer added 6.75p to 405.5p and Home Retail lifted 1.25p to 266.25p.
The top flight was mainly supported by the high oil prices which bolstered both BP and BG Group, 6.5p higher at 619.5p and 7p up at 1348p respectively. Royal Dutch Shell advanced 12p to 2059p, while Cairn Energy was the Footsie’s leading riser, up 4% or 135p to 3481p.
British Gas parent Centrica, meanwhile, advanced 7.75p to 295.25p despite a warning that overall operating profits for the first half of this year would be “materially lower” compared with a year ago, mainly due to poorer performance in its British Gas residential arm.
Analysts said the trading update gave a clear signal that Centrica intended to recover some of its margin pressure through higher domestic tariffs.
Nuclear firm British Energy proved the exception to the progress made elsewhere in the sector, following reports that the under-offer business was unlikely to be sold to a single bidder. The company fell 2p to 703p, but recouped heavier losses earlier in the day.
Banking stocks endured a mixed session, with HSBC faring well after its first quarter trading update pleased investors, particularly lower-than-expected bad debt charges in the US.
The bank also reported profits higher than in the same period last year, despite the impact of the credit crunch, sending shares 16p higher at 882p, a rise of almost 2%.
But a mark-down for Barclays from broker Citi left the bank among the fallers, off 6.75p at 444.75p. Barclays is due to issue a trading update later in the week. Other financials on the back foot included Lloyds TSB, which slipped 8.25p to 424.75p.
The leading Footsie faller was pubs and leisure group Whitbread after Morgan Stanley lowered its target price on the firm, knocking shares 31p down to 1364p.
This contrasted with the biggest second-tier riser, power company Chloride. The firm surged 34% or 72p to 280p after it rejected an initial takeover approach from US rival Emerson Electric, which valued the firm at more than £657 million.
The four biggest Footsie risers were Cairn Energy, up 135p to 3481p, Kingfisher ahead 5.4p to 151.7p, Centrica up 7.75p to 295.25p and G4S ahead 6.25p at 240p.
The biggest Footsie fallers were Whitbread, down 31p to 1364p, Vedanta Resources off 50p at 2350p, Lloyds TSB down 8.25p at 424.75p and Barclays, which was 6.75p lower at 444.75p.