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With crude prices near all-time highs and the dollar rising, oil majors can always find support.
But investors may be hoping to give BP a further boost following news reports that Abu Dhabi National Oil Co. (ADNOC) recently considered acquiring the energy giant.
However, sources said the Emirates state oil company’s deliberations did not advance beyond the preliminary stages and the reaction was therefore less optimistic.
Apparently, the plan stalled after ADNOC determined that BP was not a “suit” for the company – although politics may also be a factor given the tensions in the Middle East.
But the fact that Abu Dhabi National Oil Co. is even considering a £90bn deal to buy out or take a large stake in the company could set off alarm bells in the City of London. BP reported profits of more than 11 billion pounds last year and is the world’s least valued oil major, measured by market capitalization and cash flow.
BP shares rose 3.7%, or 19.1p, to 539.1p. Rival oil giant Shell’s shares rose 2.8%, or 80p, to 2,937p.
Mining stocks dominated the blue-chip sector, reflecting rising metals prices – especially gold’s inexorable rise to record highs.
Fresnillo, which mines the yellow metal, was the standout, rising 7.6%, or 44p, to 622.5p, while Chilean copper giant Antofagasta rose 2.2%, or 48p, to 622.5p. Reaching 2,266p. Strength in commodity stocks pushed the FTSE 100 index up 0.9%, or 71.78 points, to 7995.58 points. The FTSE 250 fell 0.3%, or 65.63 points, to 19,721.24 points.
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Not all commodity-related stocks rose. Energy industry infrastructure services provider Petrofac gave shareholders an update on its ongoing strategic and financial restructuring efforts, sending shares tumbling 20.5%, or 6.82p, to 26.5p. The company said it “continues to face challenges” in obtaining new performance guarantees, but added that discussions were continuing.
Housebuilders are in demand as JPMorgan analysts highlight the sector’s recovery opportunities during the upcoming election, with housing expected to be a key focus for all political parties.
Bank of America analysts upgraded a number of housebuilders to overweight, including blue-chip Taylor Wimpey (up 3.3%, or 4.35p, to 134.6p) and Persimmon (up 1.3%, or 16.5p, to 1,282p) ).
But airline stocks were the biggest losers on the FTSE 100, with EasyJet down 4.3%, or 23.4p, to 527p, while British Airways owner IAG fell 3.8%, or 6.45p. to 162.65p on rising fuel costs and concerns about escalation.
The biggest decliner among small-cap stocks was Bermuda-based non-life specialty insurer R&Q. Shares in the company fell 45.4%, or 2.49p, to 3p after it warned of an annual pre-tax loss due to rising costs of selling off business units.
Shares in Bens Creek, which owns metallurgical coal mines in North America, fell 32.4%, or 0.28p, to 0.58p on news that the company had laid off 44 workers in West Virginia due to low prices and financial constraints.
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