Commodities boost post-Christmas FTSE

A marginal lift in oil prices lent a hand to the London market today as commodity stocks bolstered the first post-Christmas session.

Oil prices climbed back above the $40 a barrel mark, helping majors BP and Royal Dutch Shell make strong advances.

The FTSE 100 Index raced 103.2 points ahead to 4320.1 by mid morning, despite a further fall for sterling, which inched yet closer to parity with the euro at a record low of 1.02 euros to the pound.

Trading volumes remained subdued with many still off until the New Year, but a more than four dollar rise in the cost of crude helped provide direction in an otherwise quiet day for corporate and economic news.

The increase came after the United Arab Emirates said it would cut output to comply with oil cartel Opec’s supply curbs and amid unrest in the Middle East.

BP and Royal Dutch Shell shares saw gains of more than 4%, up 20p to 516p and 75p to 1728p respectively.

Shares in Royal Bank of Scotland, which is 58% owned by the UK Government, were also making gains, up 7%.

Reports yesterday suggested that the bank may abandon its efforts to sell its insurance division.

The group, which remains in talks with a number of parties, may instead reportedly opt to keep the cash generative business, which includes Direct Line and Churchill. Its shares were up 3p at 45.7p.

But retailers put in a mixed performance after it emerged that childrenswear chain Adams was poised to become the next high street casualty after it applied to appoint administrators.

High street stalwart Marks & Spencer dropped 3p to 210.25p, although top flight supermarket group Sainsbury’s was 7.75p up at 323.25p.