Good economic news sparks FTSE rise

Improved economic confidence and a much-needed rally for BP shares ensured the London market ended the week on the front foot today.

Asian stock markets were higher and the FTSE 100 Index climbed 41 points to 5173.8 after China's export figures surged and US jobless claims fell, raising hopes that the world economy will weather the eurozone debt crisis.

BP investors were also spared further pain as shares reversed all of yesterday's loss with a gain of 8% or 29p to 394.5p.

This was despite further speculation over the future of the company's second quarter dividend payment as chief executive Tony Hayward again refused to rule out a cut on July 27.

It is thought that BP is seeking a deal with the White House that could see the investor payouts held in "escrow" - or deferred - until the group's clean-up liabilities are clearer.

Anthony Grech, head of research at IG Index, said: "Many seem to be taking the view that the recent steep losses were an overdone knee jerk reaction to the political rhetoric, and bore little relation to the perceived value of BP."

The UK firm, which has fallen by more than 40% since the oil rig explosion in the Gulf of Mexico, led a recovery for energy stocks after the better economic news boosted oil prices to around 75 US dollars a barrel.

Royal Dutch Shell was 18p higher at 1702p and Tullow Oil lifted 20p to 1141p, while Kazakhmys was 5p higher at 1149p in the mining sector.

Elsewhere, shares in Home Retail Group showed signs of recovery after falling yesterday in the wake of a worse than expected trading update from its Argos catalogue business.

Citigroup reacted to the disappointing update by cutting its target price on the stock, but shares were still 8.3p higher at 236.6p.

The fallers board was dominated by banking stocks, with Standard Chartered down 32p to 1617p and Royal Bank of Scotland off 0.7p to 42.4p.

In a quiet session for corporate news, attention was focused on the reinsurance sector after Brit Insurance's disclosure yesterday that it had turned down a takeover approach from a private equity bidder worth £10 a share.

The Lloyd's of London insurer, which sponsors the England cricket team, rose 21% or 154.5p to 884p, while others in the sector to benefit included Catlin with a gain of 20.9p to 347.3p.