Market Report: Asset sales and bid talk drive BP to the summit

A number of factors conspired to land BP at the top of the blue chip index last night, with a sale of assets by the company and positive analyst comments topped off by talk of it being a potential takeover target.

The oil giant reached pole position after making 14.75p to 473.1p, with market gossips occupied for most of the day by speculation that Royal Dutch Shell is considering making a play for the company, a scenario described by one trader as "poppycock".

Chatter emerged later in the session that Exxon Mobil – which has been previously linked with the group – isanother supposedly interested party. According to the vague tittle-tattle, as well as looking at a bid of around £7-a-share, both Exxon and Shell are starting to build up a stake in BP.

However, many were instead attributing the rise to BP getting rid of a number of assets in Pakistan for a better price than expected, as well as some upbeat broker coverage.

The company announced that it is getting $775m (£490.6m) from United Energy Group for the oil and gas units, with the money going towards paying for the fallout from the Gulf of Mexico oil spill, which is expected to cost the company $40bn.

BP was also helped by Credit Suisse, which reiterated the stock as its "top pick for long-term investors". The broker's analysts raised its target price to 585p from 515p, although Jefferies was less keen, initiating coverage with a "hold" recommendation.

Overall, the FTSE 100 ended up 30.46 points better off to close on 5,891.21, leaving those who believe it will breach 6,000 by the end of the year still living in hope.

There was some vital economic data to be analysed either side of midday. Although the announcement that consumer inflation had risen to 3.3 per cent was a disappointment, the afternoon brought better news as figures from the States showed retail sales inNovember were up again.

Elsewhere, Whitbread finished at the foot of the index after sitting there for most of the day. The owner of Premier Inn and Costa Coffee dropped,despite forecasting strong growth in its trading update.

Execution Noble's analyst Alistair Macdonald – who has the company on a "buy" recommendation – said the latest update "should reassure the market that the improved trading remains on track", but instead Whitbread fell 50p to 1,740p.

Meanwhile, takeover talk boosted Scottish & Southern Energy up 14p to 1,150p as vague rumours continued to swirl around the energy supplier.

Topping the FTSE 250 was Imagination Technologies after the chip maker released its first-half results, and – as predicted by analysts – the company took the opportunity to announce an acquisition. However, unlike when Imagination revealed its $47m deal to buy HelloSoft last November, this time investors reacted more positively and pushed it up 20.5p to 380p.

The group will spend $27m on Caustic Graphics, an American company that specialises in 3D graphics. Imagination hopes the deal will enable it to develop the technology for mobile phone manufacturers.

Meanwhile, Carpetright was looking rather shabby, as it shed 1.76p to 14p thanks to interim results which were cautious on the group's prospects for 2011. The carpet retailer revealed that its first-half profit had fallen nearly 30 per cent, and its finance director added that recent disappointing mortgage data has had "a knock-on impact through the rest of the housing chain at the moment".

Still, at least one of the richest men in the world believes in it; it wasrevealed late on Monday that Bill Gates has upped its stake in the company to 6 per cent.

Betfair's bad week continued, with the gambling company – which is about to join the FTSE 250 – retreating 191p to 990p, after it lost over 4 per cent on Monday. Its half-year earnings failed to match expectations, and the company now trades at well below 1300p, the price at which shares were sold when it floated in October.

Among the small-caps, Hardy Underwriting eased back 9p to 273p after its rival Beazley abandoned its attempt to buy the Lloyd's of London insurer. Beazley has given up on the deal following the refusal of its final offer of up to 350p-a-share.

Execution Noble said that, given the refusal, it expects Hardy's management to "come under pressure todeliver quickly on their growth strategy given that Beazley's final offer comes in at around 1.25 times 2010estimated tangible book value".

Meanwhile, Renovo – which develops scar reduction drugs – made a small gain of 0.25p to finish on 48p after the announcement of its preliminaryresults. Analysing the numbers, Peel Hunt's Paul Cuddon said that the biotech company is "well positioned" thanks to "plenty of cash, a world class IP platform in wound healing and a drug [Juvista] nearing the end of its first Phase 3 trial in a potentially lucrative market."

Start your day with The Independent, sign up for daily news emails
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own