FTSE in black as expected BP change lifts sentiment

The group was one of the biggest risers on the FTSE 100 Index, which close d 38.50 points higher at 5351.12.

The Footsie was given late-session momentum after the Dow Jones Industrial Average on Wall Street rose following an earnings upgrade from FedEx and positive new homes sales data in the United States.

BP was in the limelight on both sides of the Atlantic, as the group told the City that "no final decision" had been made on boss Mr Hayward's future ahead of a board meeting yesterday evening.

Speculation linked American managing director Bob Dudley to the chief executive post and BP shares were 18.35p higher at 416.95p as investors hoped the appointment would help the company to move forward after the oil spill disaster.

But the firm's second quarter results due today are likely to make for painful reading, revealing provisions running into tens of billions of dollars for the Gulf of Mexico spill.

Banks also dominated the blue-chip risers board after the UK's big four – Barclays, HSBC and part-nationalised Lloyds Banking Group and Royal Bank of Scotland – emerged unscathed from the results of Friday's European stress test.

Barclays rose 13.65p to 315.65p, Lloyds lifted 2.48p to 66p and Royal Bank of Scotland added 1.34p to 46.67p.

The stress test results helped to boost confidence in the UK and the pound, with sterling hitting a three month high against the dollar at one stage yesterday, up 0.3 per cent to 1.55 dollars.

Other risers in the top flight included FT and Penguin owner Pearson after the group upgraded its outlook for 2010 on the back of better-than-expected half-year results.

Figures were helped by a strong performance in educational publishing, while its FT operation saw a welcome return to advertising revenue growth in the first half. Shares were six per cent higher, up 56p to 1029p.

Marjorie Scardino, who has been chief executive since 1997, said: "The 2010 finish line isn't yet in sight, but this is as good a start to our year as I've seen."

She added: "That boosts our confidence in the full year, enabling us to brighten our outlook and raise our guidance."

However, the group said: "At this early stage in the year, there is much to be cautious about. Pearson generates only a small proportion of its profits in the first half; we face tougher comparables as we go through the year; and the macroeconomic environment remains very uncertain."

Progress on the FTSE 100 was held back by declines for in mining and pharmaceuticals.

GlaxoSmithKline fell 15p to 1172p after a report at the weekend suggested the firm was interested in a takeover of struggling US biotechnology company Genzyme.

Fellow drugmaker AstraZeneca was also lower, down 201/2p at 3126p ahead of its half-year results later this week.

Among miners in the red, silver group Fresnillo was one of the worst hit, down 28p at 1063p.

Household goods giant Reckitt Benckiser was another faller, down 3p to close at 3333p, after revealing a quarter-on-quarter drop in underlying sales in Europe.

Outside the top flight, there was a further slump for social housing firm Connaught after it revealed it will breach its banking covenants.

It is in talks with lenders about securing additional funding, which it said is urgently required. Shares dived 69% or 70.64p to 31.46p.

The biggest Footsie riser was Pearson, up 56p at 1029p.