The oil majors provided a substantial prop to the FTSE 100 index with Shell taking third position and BP Amoco 12th place in the FTSE 100 rankings yesterday as investors chased the stocks amid hopes of another upward move by crude oil prices.
Crude oil prices took a determined run at $30 a barrel late on Friday, but turned easier yesterday finishing lower on the day.
Oil specialists said the move towards $30 came as markets became aware that Iraq had not returned to the market to sell crude. The forthcoming Israeli election was another factor said to have helped drive oil prices higher last week.
One oil analyst said he expected crude oil prices to come back soon into OPEC's preferred range of $22 to $28 a barrel.
Noting the steep rises in BP Amoco, up 11p at 598p, and Shell, up 17p at 574p, he said: "This looks like a good opportunity to get out of these stocks rather than risk getting left in as the tide goes out."
Friday's three-figure setback in Wall Street's tech-heavy Nasdaq Composite ensured a poor start to the London session for the TMT sectors. But sentiment took a turn for the better in mid-session with confirmation of recent intense market speculation that a bidder, or bidders, was circling Sema, the software and computer services group. Sema was a FTSE 100 constituent up until December 18th.
Sema shares rocketed to a session high of 485p, before coming off their best to close a net 54p up at 449p.
Schlumberger and Cap Gemini Ernst & Young were being put forward as the most likely bidders.
Compass, the food service business demerged from Granada Compass last week, continued its surge. The shares, one of the best performers in the FTSE 100 for much of the day, eventually finished well off their best, up 5p at 549p after heavy turnover of 18 million shares.
One sector specialist was wary of the extent of the surge in the shares, however. The stock has been over-hyped; I would take a profit now, he said.
Granada, now exclusively a media company, went in the opposite direction to its former stablemate.
Its shares dipped another 8p to 186p; turnover was even more frantic than Compass, reaching 74 million shares. BT shares galloped ahead late in the session to finish a net 28p higher at 729p, and at the top of the FTSE 100 winners list ahead of the third-quarter results expected on Thursday.
