BP leads oil stocks to drive FTSE higher

By Tricia Wright

LONDON (BestGrowthStock) – Britain’s top share index rose on Friday, boosted by gains from BP (BP.L: ) after the oil major put a containment cap on the gushing well pipe in the Gulf of Mexico and as investors expected a strong U.S. May jobs report.

At 0801 GMT, the FTSE 100 (.FTSE: ) was up 39.75 points, or 0.8 percent, at 5,250.93, after it ended up 1.2 percent to hit a two-week closing high on Thursday.

“Yesterday’s weekly jobless figures maybe just settled nerves ahead of the important monthly report this afternoon,” said Keith Bowman, equity analyst at Hargreaves Lansdown.

“Added to that, some improving sentiment for BP is certainly a large part of the FTSE’s rise this morning.”

BP grabbed the top spot on the blue-chip leader board, rising 3.9 percent, with peers BG Group (BG.L: ) and Royal Dutch Shell (RDSa.L: ) also rising, up 1.3 percent and 0.6 percent respectively.

After failing days ago to plug the well, BP managed on Thursday to shear away the gushing well pipe a mile below the ocean surface, then lowered a containment cap over the jagged hole left atop the crippled wellhead assembly in its latest bid to curtail the oil flow.

May U.S. non-farm payrolls, due at 1230 GMT, are forecast to have risen by 513,000, after a 290,000 increase in April, with the unemployment rate seen at 9.8 percent, down from 9.9 percent in April.

Banking stocks were in favor, reflecting an improvement in risk appetite, with Barclays (BARC.L: ), HSBC (HSBA.L: ) and Lloyds Banking Group (LLOY.L: ) up 0.3 to 0.4 percent.

It was a similar story with mining stocks, with Anglo American (AAL.L: ), Rio Tinto (RIO.L: ) and Eurasian Natural Resources (ENRC.L: ) climbing 0.7-0.8 percent.

Among individual movers, Prudential (PRU.L: ) gained 1.1 percent after Citigroup re-started its coverage of the firm with a “buy” rating, after the UK insurer dropped its agreement to buy American International Group’s (AIG.N: ) Asia life insurance unit.

Prudential’s management team is under no pressure to step down over the British insurer’s failed $35.5 billion bid to buy the AIG unit, Chairman Harvey McGrath said in an interview in the Financial Times.

The FTSE 100 fallers’ list was peppered with stocks perceived as defensive, with drugmakers Shire (SHP.L: ) and GlaxoSmithKline (GSK.L: ) down 0.8 percent and 0.3 percent respectively, cigarette firm British American Tobacco (BATS.L: ) off 0.5 percent, and consumer products firm Reckitt Benckiser (RB.L: ) 0.4 percent weaker.


(Graphic by Scott Barber; Editing by Erica Billingham)

BP leads oil stocks to drive FTSE higher