BP gain pushes FTSE up

Embattled oil major BP soared 5% today as investors cheered the prospect of a change at the top ahead of Tony Hayward's expected departure.

Embattled oil major BP soared 5% today as investors cheered the prospect of a change at the top ahead of Tony Hayward's expected departure.

The group was one of the biggest risers on the FTSE 100 Index, which closed 38.5 points higher at 5351.1.

The Footsie was given late-session momentum after the Dow Jones Industrial Average on Wall Street rose following an earnings upgrade from FedEx and positive new US homes sales data.

BP was in the limelight on both sides of the Atlantic, as the group told the City that "no final decision" had been made on boss Mr Hayward's future as it prepared for a board meeting on Monday evening.

Speculation linked American managing director Bob Dudley to the chief executive post and BP shares were 18.4p higher at 417p as investors hoped the appointment would help the company move forward after the oil spill disaster.

But the firm's second quarter results on Tuesday are likely to make for painful reading, revealing provisions running into tens of billions of dollars for the Gulf of Mexico spill.

Banks also dominated the blue-chip risers board after the UK's "big four" - Barclays, HSBC and part-nationalised Lloyds Banking Group and Royal Bank of Scotland - emerged unscathed from Friday's European stress test result.

Barclays rose 13.7p to 315.7p, Lloyds lifted 2.5p to 66p and Royal Bank of Scotland added 1.3p to 46.7p.

The stress test results helped boost confidence in the UK and the pound, with sterling hitting a three month high against the dollar at one stage today, up 0.3% to 1.55 dollars.

Other risers in the top flight included FT and Penguin owner Pearson after it upgraded its outlook for 2010 on the back of better-than-expected half-year results.

Figures were helped by a strong performance in educational publishing, while its FT operation saw a welcome return to advertising revenue growth in the first half. Shares were 6% higher, up 56p to 1029p.

But further progress on the FTSE 100 was held back by declines amid mining stocks and drug firms.

GlaxoSmithKline fell 15p to 1172p after a report at the weekend suggested the firm was interested in a takeover of struggling US biotechnology company Genzyme.

Fellow drugmaker AstraZeneca was also lower, down 20.5p at 3126p ahead of its half-year results later this week.

Among miners in the red, silver group Fresnillo was one of the worst hit, down 28p at 1063p.

Household goods giant Reckitt Benckiser was another faller, down 3p at 3333p, after revealing its first ever quarter-on-quarter drop in underlying sales in Europe.

Outside the top flight, there was a further slump for social housing firm Connaught after it revealed it will breach its banking covenants.

It is in talks with lenders about securing additional funding, which it said is urgently required to meet current and ongoing business needs. Shares dived 69% or 70.6p to 31.5p.

The biggest Footsie risers were Pearson up 56p at 1029p, Tullow Oil ahead 60p to 1239p, BP up 18.4p at 417p and Barclays up 13.7p at 315.7p.

The biggest Footsie fallers were African Barrick Gold down 24p to 550p, Fresnillo off 28p to 1063p, Arm Holdings down 7.2p to 346.1p and Smith & Nephew down 10p to 546p.

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