FTSE gains as BP offsets bank, miner weakness

* FTSE 100 up 0.3 pct

* BP gains on progress containing oil spill

* Miners, banks weaker; euro zone debt worries linger

By Simon Falush

LONDON, May 17 (BestGrowthStock) – Gains from oil giant BP (BP.L: ),
boosted after saying it is making progress in containing an oil
spill in the Gulf of Mexico, offset falls from miners and banks
to leave Britain’s top shares slightly firmer early on Monday.

By 0815 GMT, the FTSE 100 (.FTSE: ) was 13.91 points or 0.3
percent higher, at 5,276.76 after it fell 3.1 percent on Friday,
punished by anxiety over the euro zone debt crisis.

Shares in BP gained 1.9 percent after the oil major said it
made some progress in containing oil leaking in the Gulf of
Mexico, its first success at controlling the flow of oil into
the sea since an explosion on April 20 ruptured a well.

The oil firm, which added around 7.2 points to the index,
had around $30 billion knocked off its share price by fears
about the spiralling costs of the clean-up caused by the spill.

“The BP news shows that there is potentially light at the
end of the tunnel for the company, and sooner or later attention
will shift to the strong earnings on both sides of the
Atlantic,” said Richard Hunter, head of equities at Hargreaves
Lansdown.

Others in the energy sector were also firmer despite a
retreat in the oil price towards $70 per barrel (CLc1: ). BG Group
(BG.L: ) and Royal Dutch Shell (RDSa.L: ) added 0.2 and 0.7 percent
respectively.

In another sector heavyweight Vodafone (VOD.L: ) shares were
also a strong support to the index, up 1.8 percent after Vodacom
(VODJ.J: ), its majority owned South African business, said it
will up its dividend and reported increased earnings per share.

This was taken as a positive sign ahead of results from the
mobile phone company on Tuesday.

But analysts said that jitters over the euro zone debt
crisis, which sent stocks in Asia into retreat overnight, were
still casting a pall over markets.

“There are a couple of bright spots out there, but for now
it is still sentiment driven and that is still fragile,” Hunter
said.

Reflecting the jittery state of the market, defensive stocks
were the main support to the market outside the energy sector.

Imperial Tobacco (IMT.L: ), Tesco (TSCO.L: ) and gold miner
Randgold Resources (RRS.L: ) added 0.5 to 3.5 percent.

While gold (XAU=: ), seen as a safe haven, rose towards a
record peak, other metal prices fell sharply, denting most
miners.

Rio Tinto (RIO.L: ), Xstrata (XTA.L: ), Anglo American (AAL.L: ),
Kazakhmys (KAZ.L: ) and BHP Billiton (BLT.L: ) fell 0.6 to 2.1
percent.

Banks were mostly in retreat, pressured by euro zone debt
concerns while a downbeat note from JPMorgan also weighed on the
sector.

Shares in Barclays (BARC.L: ), Lloyds Banking Group (LLOY.L: )
and Royal Bank of Scotland (RBS.L: ) fell 0.4 to 2.1 percent as
JPMorgan said it saw the three UK banks being impacted most by
potential changes to provisioning requirements.

Asia-focused Standard Chartered (STAN.L: ) added 1.5 percent,
while HSBC (HSBA.L: ) was little changed.

Elsewhere among financials, Prudential (PRU.L: ) fell 2.1
percent after it launched a $21 billion rights issue, while Man
Group (EMG.L: ) was the top faller, down 3.7 percent after it said
it had agreed to buy rival GLG Partners.

Investment Research

(Editing by Hans Peters)

FTSE gains as BP offsets bank, miner weakness