Oil and gas surge boosts Footsie

Oil and gas surge boosts Footsie

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The FTSE 100 Index edged into positive territory, up eight points to 6010.4

BP sparked a strong session for the oil and gas sector after news of its £10 billion deal with Russia’s Rosneft, but wider progress was held back by miners.

The FTSE 100 Index edged just eight points higher at 6010.4 as BP rose nearly 2% following Friday’s announcement of an Arctic exploration alliance and share swap with Russian government-owned Rosneft.

Reports of opposition to BP’s deal from its partners in the Russian TNK-BP joint venture failed to hold back share gains for the oil giant, up 7.4p to 506.9p.

It will take a further 9.5% stake in Rosneft while Rosneft will own 5% of BP following the deal, which the UK Government described as “groundbreaking”.

Oil and gas exploration firms followed suit and posted gains, with Petrofac up 9p at 1624p and Centrica ahead 1.6p at 328.8p.

Smiths Group headed up the risers board with an 8% surge, ahead 106p to 1388p, following Friday’s after-close announcement that the firm had rejected a £2.45 billion cash approach for its medical arm.

Smith & Nephew followed it with a further 4% gain, up 27p to 712p, after weekend reports that US suitor Johnson & Johnson is preparing to make a formal offer for the group worth £7 billion.

But the market was weighed down, with no direction provided from Wall Street as US markets shut for Martin Luther King Day, and as the mining sector saw falls.

The sector was hit by worries over China’s decision to raise the reserve ratio requirement for its banks. Investors fear the fiscal tightening may curb the country’s demand for commodities.

Silver miner Fresnillo dropped more than 3%, losing 49p to 1443p, while copper miner Kazakhmys shed 25p to 1615p and Anglo-Australian group Rio Tinto lost 62p to 4374p.

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