CAIRN Energy moved close to an all-time high as oil prices continued to rise and bid hopes resurfaced.
The Edinburgh-based oil and gas explorer, which returned to the FTSE-100 on Christmas Eve, rose as high as 3,041p before closing up 6.2 per cent, or 171p, at 3,001p yesterday.
Oil traded at above $97 a barrel for much of yesterday, boosting the wi
der oil sector.
Meanwhile, rumours persisted that oil major BP and steel giant Mittal were looking at bidding for Cairn.
The Scots group, which has major reserves in India, has risen 34 per cent in a month and is less than 3 per cent below an all-time high reached in 2006 before more than £3 billion was returned to shareholders.
Elsewhere in the sector, Royal Dutch Shell added 1.2 per cent, or 25p, to 2,130p, while BP closed up 5p at 622p and BG Group rose 29p to 1,142p
Energy shares were the main strength on the first full day of trading in London since Christmas, with little corporate news to guide dealers. The benchmark FTSE-100 index closed up 18.5 points to 6,497.8 points, its sixth straight session rise. Trading was muted all day, with the index never more than 0.5 per cent above its opening level.
However, it was not dented by a nervous start on Wall Street, where weak manufacturing figures heightened concerns about the health of the US economy.
Utilities also rose in London, with the traditionally defensive sector making up three of the FTSE-100 five top places.
Perth-based Scottish & Southern Energy rose 41p to 1,662p while National Grid rose 2.9 per cent and United Utilities gained 2.4 per cent.
Banking stocks were weak overall, but Scotland's two largest companies made progress. Royal Bank of Scotland lifted 3p to 446.5p while HBOS rose 3.5p to 733.5p. HSBC, Barclays and Standard Chartered all fell less than 1 per cent.
Mining companies had a mixed day, with BHP Billiton falling 1.1 per cent as rival Rio Tinto hit back at its hostile approach. BHP closed down 17p at 1,561p, while Rio Tinto rose 8p to 5,380p. Elsewhere, Vedanta fell 1.9 per cent to 2,050p.
Retailers had a mixed day, despite expectations that yesterday would be one of the busiest days of the year on the high street. Heavy discounting is likely to eat into retailers' margins.
Clothing chain Next fell 1 per cent, or 16p, to 1,607p, while B&Q owner Kingfisher slid 3 per cent to 144.7p.
Marks & Spencer was one of the steadiest performers in the sector, closing unchanged on 550p, while Home Retail Group lost 4.75p to 323.75p and Currys owner DSG International dipped 1.25p at 101.75p.
Among mid-cap shares, UK Coal rose after the FTSE-250 company rejected an informal approach from Meinl for its mining and power generation assets on Christmas Eve. Shares strengthened 2 per cent to 459p on hopes of further interest.
The full article contains 526 words and appears in The Scotsman newspaper.
