Investors enjoyed a buoyant start to the year today after the FTSE 100 Index powered beyond the 6000 barrier and BP shares jumped 5%.
With commodity stocks stronger amid encouraging signs over the pace of America’s economic recovery, London’s top flight recouped losses seen on New Year’s Eve to climb 2.4% or 142.6 points to 6042.5.
The latest two-and-a-half-year high for the FTSE 100 Index also reflected a jump for BP as investors digested reports that Royal Dutch Shell considered a takeover bid at the time of the Gulf of Mexico oil spill.
Fears over liabilities from the disaster prompted Shell to pull back from making an offer, but the speculation was enough today to help BP shares rise 24.7p to 490.2p.
Analysts also noted comments from the lawyer in charge of BP’s compensation fund that suggested payments could be half the expected level of $20bn (€15bn).
At the same time, renewed optimism over the global economy meant oil prices hit $92 (€68), near to a two-year high.
Robust manufacturing data in the United States triggered a rally for markets on Monday and was mirrored in the UK after the Chartered Institute of Purchasing & Supply recorded the sector’s strongest performance in 16 years.
Commodity stocks on the front foot included Xstrata after a gain of 56.5p to 1562p, while Antofagasta lifted 52p to 1664p and Petrofac cheered 65p to 1652p.
Royal Dutch Shell was 28p higher at 2166.5p after the BP speculation, while Cairn Energy rose 13.8p to 433.8p after it said it would use two rigs to drill up to four exploration wells off Greenland this year.
Other significant risers included Royal Bank of Scotland, whose shares recovered from weakness over Christmas to lift 1.9p to 40.9p.
In corporate news, Blacks Leisure gave the retail sector an unexpected boost today by posting December sales figures ahead of market forecasts.
The cold snap helped increase like-for-like sales in its outdoor business by 10.2% last month, despite strong comparative figures the previous year. Shares jumped 2.25p to 42.25p, a rise of 6%.
Sports Direct International, which has a 14% stake in Blacks Leisure, rallied more than 7%, up 11.4p to 171.7p.
Next, which is due to update the City on its festive trading performance on Wednesday, rose 64p to 2039p and Argos owner Home Retail Group added 7.9p to 196.4p.