UK's top share index rises

Strength in BP helped Britain's top share index seal a four-day winning streak on Monday following a reassuring production update from the oil producer, taking the benchmark index to its highest closing level in seven weeks.
Selected retailers also lent support to the wider market, with shares in Britain's fourth-largest food seller Morrison and discount clothing seller Matalan both gaining on bid speculation.
The FTSE 100 share index rose 51 points, or 0.9 percent, to 5,884.4 - at its highest level for the session and its best close since May 12.
Business was sluggish as Wall Street traded a half session ahead of Tuesday's national US holiday, with total market turnover at only 2 billion shares by the close of play.
But market observers said sentiment had improved since the recent swingeing sell-off, which had been triggered by concerns that the US Federal Reserve might increase interest rates.
"I think that what we are seeing is some positive momentum. The market was very oversold, and now we are getting to see some buying coming back," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"And I think that there's a growing feeling that the US Federal Reserve is not going to raise interest rates much further unless the news flow is bad."
Oil majors accounted for about a third of the FTSE's gains, with BP adding 1.2 percent. The oil company said it expected oil and gas production to have fallen 2.5 percent in the second quarter but that higher oil prices during the quarter suggested earnings would still have beaten the same period of 2005.
"They are basically fine, I mean the production guidance was at the low end of expectations, but it's a big quarter for maintenance etc, so there's nothing to worry about there. All in all a solid set of numbers I think," said a market maker.
Elsewhere in the sector, Royal Dutch Shell and BG Group rose about 1.5 and 2 percent, respectively.
Merger and acquisition speculation boosted several retailers, with Morrison up 3.7 percent after a Sunday newspaper reported that a private equity consortium of Texas Pacific, CVC and Permira was considering a 6 billion pound ($11.1 billion) bid for the group.
Among the mid-caps, Matalan climbed 3.6 percent after a report that Chairman John Hargreaves had enlisted Barclays Capital to support a take-over bid of at least 800 million pounds for the firm.
BAE Systems was the biggest FTSE faller, down 3.3 percent after the defence company over the weekend said that investment bank Rothschild had set a price of 2.75 billion euros for a 20 percent stake in planemaker Airbus. This was below the 5 billion euros estimated by recent media reports.
Compass, the world's biggest catering company, added 3.4 percent, boosted by renewed speculation that a private equity company might be eyeing a take-over, dealers said. The shares were buoyant late last year on speculation that a US-based private equity firm was considering a bid.
Imperial Chemical Industries was among the top blue chip gainers, rising 3.2 percent in a continuing reaction to last week's sale of its Uniqema unit to Croda International. Traders said the deal and ICI's application of some of the funds to its pension deficit made it attractive to a potential predator.
Elsewhere, oil and gas services company Petrofac jumped 11 percent after it said net profit for 2006 would significantly exceed the board's previous expectations.
Merger speculation lifted software company Misys just under 6 percent. US financial data company SunGard has registered its interest in taking over the company, the Sunday Times said.
Monday's edition of the Daily Telegraph said the former head of the banking division of Misys is in talks with private equity backers about leading a bid for the company. Ivan Martin's bid of 1 billion pounds would pit him against a possible management buyout announced last month headed by Chief Executive Kevin Lomax.