The London market ended slightly higher as lower oil prices hit the energy sector and overshadowed a strong session for UK insurers.
The FTSE 100 Index finished up 1.5 at 5864.6, as a stronger opening for Wall Street’s Dow Jones Industrial Average gave a late boost.
Traders in the US put several days of heavy losses behind them and turned their focus to a speech by Federal Reserve chairman Ben Bernanke on the outlook for the US economy.
The dollar was weak against both the pound at 1.64 and euro ahead of Mr Bernanke’s speech. Factory orders in Germany also came in much stronger than expected. The euro rose to 1.12 against sterling.
The oil and gas sector weighed on the market as crude oil on the New York Mercantile Exchange for July delivery dropped 0.2% to 98 US dollars a barrel.
The cost was driven down by the prospect of slowing US economic growth and expectations that OPEC members will vote tomorrow to boost production at the organisation’s member meeting in Vienna, Austria.
Petrofac lost 18p to 1544p, Royal Dutch Shell dropped 11p to 2132.5p, Essar Energy was off 3.9p at 434.5p, Cairn Energy edged 1.9p lower at 427.5p and BP was down 2.7p at 448.2p.
The London market was given support from Friends Life owner Resolution after the insurance consolidation firm said it planned to return around £500m to shareholders. The stock shot up nearly 3% to the top of the risers’ board and was 8.4p higher at 308.3p.
Fellow insurers followed suit, with Admiral up 28p at 1737p, Legal & General ahead 2p at 115.6p and Standard Life advancing 2.6p to 206.2p.
Elsewhere in the financial sector, Lloyds Banking Group recovered some of yesterday’s losses as the taxpayer-backed bank moved ahead 0.7p to 47.6p.
The heavily-weighted mining sector lifted the blue-chip index with Anglo-Australian firm Rio Tinto adding 51p at 4199p, Xstrata up 15p at 1370.5p and Vedanta Resources ahead 22p at 2080p.
Fashion house Burberry also built on recent gains, rising 5p to 1312p, after an upgrade from broker Goldman Sachs and speculation that French multi-national company PPR may be looking for acquisitions in the luxury goods sector.
TUI Travel made a bid to avoid relegation from the FTSE 100 Index in this week’s quarterly review by rising 0.3p to 225.3p.
The retail sector came under pressure after a British Retail Consortium survey revealed sales values were 2.1% lower on a like-for-like basis in May.
Marks & Spencer dropped 1.7p to 378.5p, Next fell 3p to 2272p and Primark owner Associated British Foods dipped 5p to 1069p after the BRC said May’s figures were more reflective of the broader retail picture.
Outside the top flight, shares in entertainment retailer HMV lost earlier gains and plunged 12% after it announced a refinancing deal with lenders.
The agreement gives the chain breathing space in its battle for survival, but shares dropped 1.75p at 10.5p as investors digested the terms of the debt package and potential impact on existing shareholders as a result of giving lenders a stake in the business.
The biggest Footsie risers were Resolution up 8.4p at 308.3p, Centrica ahead 7.8p at 322.3p, Legal & General up 2p at 115.6p and Admiral ahead 28p at 1737p.
The biggest Footsie fallers were Whitbread down 29p at 1552p, Smiths Group off 22p at 1201p, Reed Elsevier down 10p at 546p and Amec off 18p at 1109p.