FTSE hits 3-week closing high, buoyed by oil stocks

By Tricia Wright

LONDON (BestGrowthStock) – Britain’s top share index closed higher on Monday, buoyed by oil stocks after crude reached a two-year peak, while banks fell on fears over euro zone debt as EU ministers met to discuss ways of preventing debt contagion.

The FTSE 100 ended up 24.96 points, or 0.4 percent, at 5,770.28, for its highest close since November 15 after a choppy session which saw the index dip to 5,728.46.

Integrated oil stocks were the standout gainers after the crude price neared $90 earlier in the session.

Analysts said cold weather in Europe and in parts of the United States should limit the downside for prices because of greater heating oil demand.

But some weakness was seen among risk sensitive banks, with investors rattled after Moody’s Investors Service cut Hungary’s credit rating.

Euro zone finance ministers meeting on Monday faced IMF pressure to increase the size of a 750 billion euro ($1,006 billion) safety net for debt-stricken members to halt contagion in the single currency bloc.

“The UK market does appear to be outperforming many of the other continental European markets, which perhaps suggests that the UK’s getting a slight boost from not being within the euro zone,” said Peter Dixon, economist at Commerzbank.

“I suspect the European financial ministers’ meeting is not going to be that important, because the real big one (the EU’s heads of government meeting) is on the 16th and 17th December.”

BP BOOSTED

BP led energy stocks higher, adding 3.4 percent, as investors welcomed further developments on the company’s asset sale aimed at raising cash to pay for its massive oil spill in the Gulf of Mexico.

Pakistan’s Oil and Gas Development Co. Ltd. said it will make a joint bid for BP’s assets in Pakistan with Pakistan Petroleum Ltd..

Sentiment surrounding the British oil major was also helped after White House oil spill commission staff said on Friday that BP believes the spill’s actual flow rate may have been as much as 50 percent below the government’s final estimate.

Miners found favor, following metals prices higher after U.S. Federal Reserve Chairman Ben Bernanke said more quantitative easing was possible.

Xstrata was the best sector performer, up 3.4 percent, following newspaper reports saying Glencore, which holds a stake of nearly 35 percent in the miner, is preparing for a 6.3 billion pound ($9.94 billion) London Stock Exchange debut as early as April next year.

Gold miner Randgold Resources bucked the trend, off 2.4 percent despite a firmer gold price, with traders citing political turmoil in the Ivory Coast.

Upbeat broker sentiment helped Rolls-Royce, up 2 percent, with BofA Merrill Lynch lifting its rating on the company to “buy” from “neutral.”

Aerospace electronics group Cobham, however, fell 1.9 percent, as the same broker cut its rating on the stock to “neutral” from “buy,” and after the company agreed to buy U.S. surveillance company RVision Inc for $28 million.

A UBS downgrade to “neutral” hit Tesco, off 1.6 percent, ahead of the retailer’s third-quarter sales update on Tuesday.

(Editing by David Cowell)

FTSE hits 3-week closing high, buoyed by oil stocks