High oil price props up FTSE

The London market made steady progress today as sustained high oil prices helped the FTSE 100 Index recover some of yesterday’s near 3% slide.

Crude near the 130 US dollar a barrel mark saw strong gains for energy stocks, with miners also on firmer ground following a big sell off in the sector yesterday.

By mid-morning the Footsie was up 53.7 points to 6245.3, despite a host of retailers and banks falling in the red. Their falls came as investors digested the latest Bank of England minutes which showed little appetite for further interest rate cuts.

The leading Footsie riser was Royal Dutch Shell, up 4% or 96p at 2237p after oil prices climbed to 130 US dollars a barrel. BP lifted 20p to 648p, while fellow prospectors Cairn Energy and Tullow Oil made strong gains, up 153p to 3672p and 33.5p to 967p respectively.

A mark-down for miners from Morgan Stanley sent the sector tumbling yesterday, but investors returned today amid hopes the sell-off was overdone. Kazakhmys, which lost 8% yesterday, was up 48p to 1839p. BHP Billiton was 40p ahead at 2063p with a host of other mining heavyweights in the black.

The Bank revealed it was more concerned with getting inflation back down at 2% than boosting economic growth as members voted eight to one to hold rates steady this month.

It saw retailers like Argos owner Home Retail Group shed 17.25p to 231.75p, with Sainsbury’s off 7.75p to 347.75p.

Banks hoping for cheaper mortgages were also on the back foot, with Royal Bank of Scotland worst off with a 5p drop to 249p. Halifax Bank of Scotland slid 8.25p to 457p.

Lambert & Butler maker Imperial Tobacco was the Footsie’s leading Footsie casualty, following a downgrade from JP Morgan after yesterday’s bigger than expected £4.9 billion rights issue. The stock was down 12% or 299p to 2156p.