BP shares revival boosts FTSE

Further signs of progress on BP’s attempts to plug the oil spewing into the Gulf of Mexico drove a fresh surge in the company’s shares today.

Further signs of progress on BP’s attempts to plug the oil spewing into the Gulf of Mexico drove a fresh surge in the company’s shares today.

BP said it had installed a new sealing cap on the oil well, although it stressed that the system had never been deployed at such depths and that its effectiveness can not be assured.

Shares have risen 30% in the month so far and were ahead by another 5% at one point today before settling 3% or 11.25p higher at 410.2p, as the FTSE 100 Index climbed 79.7 points to 5246.7.

Investors were buoyed by Wall Street’s first five-day winning streak since April, while aluminium giant Alcoa kicked off the second quarter reporting season in the United States with better than expected results.

There was also relief for investors in the latest inflation figures, which showed a fall in the key CPI measure from 3.4% to 3.2% in June. This was in line with expectations and eased fears of an imminent hike in interest rates, although analysts said core inflation still remained a problem.

Mines recovered from a weak start to join the risers board, with Kazakhmys ahead 24p at 1081p and Eurasian Natural Resources 31p stronger at 336p.

Testing firm Intertek set the pace at the top of the FTSE 100 Index with a rise of 62p to 1639p, while materials and chemicals firm Johnson Matthey added 61p to 1621p, a gain of 4%.

In corporate news, luxury goods group Burberry was 6p higher at 795.5p after better-than-expected first quarter sales figures, including a 27% rise in revenues as customers snapped up accessories and outerwear.

Outside the top flight, homewares retailer Dunelm was rewarded with a 4% rise in its share price after continued improvement in margins helped offset a weakening trend in its recent sales performance.

Analysts at Numis upgraded their profits forecast for the year to July by £2m (€2.4m) and described the retailer as one of its preferred picks in the sector. Shares were 14.7p higher at 372.7p.

In a decent session for retailers, Game Group lifted 2.8p to 65.1p and Home Retail Group added 6.4p to 231.9p.

One of the biggest gains in the FTSE 250 Index was achieved by JD Wetherspoon as investors geared up for a full-year trading update from the pubs chain tomorrow. Shares were 19.7p higher at 426.8p.

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