FTSE rally continues with BP heading the charge
Under pressure oil giant BP (LON:BP) is heading the rallying blue-chip index in early trading this morning with the group expected to confirm it will be able to manage the costs of the oil spill disaster in the Gulf of Mexico.
Kate Neilson
shareprices.com - Friday, June 04, 2010
At 09:30BST the FTSE 100 is up to 5252.66 points, 0.8 per cent up with a gain of 40 points. And it was BP stock that was pushing the UK’s top index up during the first hours of trading.
BP is set to announced whether its latest attempt to cease the spill from the leaking oil well in the Gulf of Mexico has been successful. The oil firm has lowered a cap onto the well with the vision to pipe some of the oil from the leak to ships on the water surface. The move has come since the latest attempt to block the leak – the ‘top kill’ operation – failed over the weekend.
The group has come under heavy scrutiny from the US Government and President Obama himself who criticised the oil company for not reacting fast enough to the disaster. But with the government announcing it will bill BP $69m (£47.1m) for expenditure incurred from its response to the spill and BP estimating the total cost of the spill amounting to $990m (£675m), the group’s shares have started to reclaim the 24 per cent of the value they’ve lost since the oil began to leak on 20 April.
BP’s shares are currently 3.2 per cent up at 09:30BST after hitting a high price of 451.64p earlier in trading – an increase of 4.5 per cent or 20p.
BP CEO and Chairman, Tony Haward and Henric Svanberg, are expected to share information with shareholders and analysts to demonstrate that the group has the financial resources to cover the total cost of the spill disaster. However, rumours of the group becoming a takeover target have emerged in recent days with the firm devaluing significantly since the oil spill.
Heavily-weighted oil stocks joined BP to give the FTSE an early boost with the sector up over two per cent as a whole. At 09:30BST Tullow Oil (LON:TLW) was up 25 points or 2.2 per cent, BG Group (LON:BG) had gained 1.5 per cent, Royal Dutch Shell (LON:RDSA) had gained 19 points to improve one per cent to 1859.50p and Cain Energy (LON:CNE) improved by 0.3 per cent.
Also in high demand this morning are telecom stocks with Vodafone (LON:VOD), BT Group (LON:BT.A) and Cable & Wireless Worldwide (LON:CW) amongst the gainers on the FTSE 100.
It’s been a mixed morning of fortunes for the mining and banking sector with no exceptional performance within each sector.
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