BP gains help propel FTSE back into positive territory

London's Footsie rose 59.86 points to 5211.18, having started the day on the front foot as a bigger-than-expected rise in United States home sales lifted the mood on Wall Street.

But the market eased from a near-two per cent gain earlier in the session due to an indecisive start to trading on America's Dow Jones Industrial Average.

The Dow had surged initially because of positive US jobs news, but data showing a weaker-than-expected performance from the manufacturing sector soon pared back the gains.

It was also another difficult day for the euro, which fell against the pound and the dollar as persistent eurozone concerns failed to budge.

Sterling gained 0.2 per cent to 1.20 euros, while the single currency slipped to just below 1.22 dollars.

However, it was a better day for BP in a much-needed positive session for the stock.

BP shares have slumped in value by more than a third following the Deepwater Horizon disaster.

But the stock started to rally on Wednesday night and closed up 21/2p to 432.3p as the group also benefited from an increase in the price of oil to $74 a barrel at one stage, despite downgrades for the company from ratings agencies.

Many miners were also on the rise thanks to firmer base metal prices, although it was a mixed session for the sector and gold miner Randgold Resources was among a handful of blue chips in the red.

It fell 155p to 5975p as investors moved their money out of the traditional safe haven.

In a quiet session for corporate news, shares in B&Q owner Kingfisher were three per cent higher as the company overcame the impact of poor seasonal weather to post a 13 per cent rise in first quarter UK profits. The stock rose 5.8p to close at 229.6p.

Chief executive Ian Cheshire said: "The headwinds we anticipated at the start of the year look set to continue, but we are in good shape and well prepared."

Chemicals firm Johnson Matthey enjoyed a similar rise after it reported a slight fall in full-year profits, but said the new financial year had got off to a good start. Shares were 15p higher at 1570p.

Hargreaves Lansdown equity analyst Keith Bowman said: "Although profits are down on last year, group diversification and exposure to growth arenas such as pollution control continue to provide resilience.

"However, management outlook comments summarise the dilemma for investors – strong current trading is counterbalanced by uncertainty for the medium term future."

A raft of commodity stocks rose because of more positive economic news as well as comments from one broker that the Australian government could be ready to compromise on its planned super-tax on the mining sector.

Petrofac soared 59p to 1199p, while Eurasian Natural Resources gained 421/2p to 1031p.

Broker upgrades also accounted for many risers, with advertising giant WPP adding 221/2p to 6691/2p after UBS rated the firm a buy.

Insurer Aviva was another beneficiary after Daiwa analysts said the firm was likely to gain from the refocusing of investor attention on the UK life sector following the collapse of Prudential's bid for AIA. Aviva was 13.2p dearer at 339.1p.

The biggest Footsie risers were Petrofac up 59p to 1199p, Arm Holdings ahead 12.7p to 267.9p, Eurasian Natural Resources up 421/2p to 1031p and Aviva ahead 13.2p at 339.1p.

The biggest Footsie fallers were Randgold Resources down 155p to 5975p and BHP Billiton off 161/2p to 18391/2p.