BLUE-CHIP shares ended slightly ahead last night as high oil prices helped support energy stocks, while an HSBC update boosted sentiment in the battered banking sector.
The benchmark FTSE 100 index rose 15.9 points, or 0.26 per cent, to close a
t 6,220.6, having swung earlier between gains of 0.8 per cent and losses of 0.3 per cent.
Investors shrugged off data that showed factory inflation rose at a record pace in April, as fuel and food costs soared.
Keith Bowman, an equity analyst at Hargreaves Lansdown, said: "One thing about the FTSE 100 is that it's probably not the best reflection of UK plc's economy. It's probably a broader reflection of the global economy. Oils, miners and banks put together make up about 50 per cent of the index."
Jimmy Yates, dealer at CMC Markets, said: "There's been little to define activity in equity markets despite the FTSE having broken higher in early trade only to see gains eroded by the bumper (factory gate] data, which in turn is threatening the prospect of further rate cuts from the Bank of England."
DIY retailer Kingfisher gained 5.4p to 151.7p as rumours of interest from private equity firm Blackstone and US giant Home Depot encouraged traders.
The bid speculation helped Marks & Spencer, Next and Argos owner Home Retail Group move higher despite the tougher high street fortunes experienced by the three in recent times. Next rose 19p to 1,309p, Marks & Spencer rose 6.75p to 405.5p and Home Retail was up 1.25p to 266.25p.
The top flight was mainly supported by the high oil prices, which bolstered BP and BG Group – 6.5p higher at 619.5p and 7p up at 1,348p respectively. Royal Dutch Shell advanced 12p to 2,059p.
Centrica advanced 7.75p to 295.25p despite warning that overall operating profits for the first half of this year would be "materially lower" than the year-earlier period, mainly on a poorer performance by its British Gas residential arm.
Analysts said the trading update gave a clear signal that Centrica intended to recover some of its margin pressure through higher domestic tariffs.
Banking stocks endured a mixed session, with HSBC faring well after its first-quarter trading update pleased investors, particularly lower-than-expected bad debt charges in the US.
The bank also reported profits higher than in the same period last year, despite the impact of the credit crunch, sending its shares 16p higher at 882p, a rise of 2 per cent.
But a mark-down for Barclays from broker Citi left the bank among the fallers, off 6.75p at 444.75p. Barclays is due to issue a trading update later in the week. HBOS edged up 0.5p to 505.5p, but Royal Bank of Scotland eased 2.25p to 344.75p.
Whitbread fell 31p to 1,364p after Morgan Stanley lowered its target price on the firm.
The full article contains 514 words and appears in The Scotsman newspaper.
