Oil stocks help FTSE rise

Oil stocks were making decent headway today as the London market made a strong start to the shortened Christmas week.

The FTSE 100 Index was up 42.1 points by mid-morning – led by explorer Cairn Energy, which rose more than 5% or 162p to 3208p after bringing forward exploration plans in Greenland.

Royal Dutch Shell was meanwhile up 30.5p to 1749.5p or 2% amid reports of Chinese interest in Nigerian assets up for sale.

Interest in the sector was heightened by the latest meeting of the OPEC oil cartel scheduled for Tuesday, with no change in production levels for 2010 expected.

Shell’s rival BP added 8.2p to 584.7p, while explorer Tullow Oil added 21p to 1273p.

Bankers were also on a firmer footing today after suffering last week on worries over the new capital buffers which could be imposed by regulators in Basel to prevent another financial crisis.

Barclays steadied today with a gain of nearly 2% or 4.4p to 268.65p, while HSBC was 11.4p dearer at 691.4p.

British Airways was another gainer, up 3.2p to 191.7p as the airline continued to claw back ground after its successful injunction against a devastating Christmas strike.

Meanwhile cruise ship operator Carnival was also a gainer, adding 32p to 2128p as brokers lifted ratings after Friday’s well-received results.

However, temporary power specialist Aggreko made a disappointing start to life as a top flight stock. Shares were 13.5p lower at 886.5p following its promotion from the FTSE 250 Index.

London Stock Exchange was 1.5p down at 585p after it announced plans to buy smaller rival Turquoise and merge it with its Baikal business.

In the second tier, oil services firm Hunting was the top riser, adding 17p to 524p or 3% after it forecast trading “toward the high end of market expectations” this year.