After a poor finish yesterday, the FTSE 100 index has started flatto a better start with gains of 2.7 points or 0.05% to 5,504.2, as oil stocks such as BP are advancing as US crude oil prices held around $61 a barrel, but PartyGaming has slipped after a ratings cut.
Topping the list of FTSE gainers is Royal Dutch Shell with gains of 16p, or 0.89%, to 1,806p, while BG Group is following a close second, up 4.5p, or 0.82%, to 552p. BP is also up 5p, or 0.79%, to 635.5p.
On the downside, PartyGaming has fallen 7.5p, or 5.54%, to 128p, after Lehman cut its rating on the stock to "underweight" from "overweight" following a strong rally in the stock on the back of hopes for further growth in the sector.
Mining shares have also fallen back after gold shed 1% in Asian trade and dealers said they expected a steep correction in the price of the precious metal from 24-year highs. BHP Billiton has dropped 6.5p, or 0.73%, to 888.5p, while Rio Tinto is down 17p, or 0.68%, to 2,473p.
Elsewhere, FirstGroup has soared 21.75p, or 6.01%, to 383.75p, after winning rail franchises for Greater Western and Thameslink/Great Northern.
Marks & Spencers has fallen 0.75p, or 0.15%, to 484.75p, as investors await a ruling on whether it can offset losses from subsidiaries in other European Union countries against profits at home, a decision which will have implications for dozens of firms.
In Japan, the Nikkei 225 Stock Average index has gained 40.16 points, or 0.26%, to 15,778.86 at its close a short time ago, as stocks rose to their highest in more than five years, led by steelmakers, such as Nisshin Steel.
Nisshin Steel, Japan's second-largest maker of stainless steel, surged 33 yen, or 9%, to 400, the most since September 2003, after the company said it expects to have a net profit of 45 billion yen for the fiscal year through March 2009.
Other steelmakers also rose as Sumitomo Metal Industries, the nation's third-largest maker of the alloy, jumped 38 yen, or 8.4%, to 492, while Kobe Steel, the fourth largest, climbed 29 yen, or 7.7%, to 404.
Elsewhere, Inpex, the nation's largest oil explorer, also climbed 40,000 yen, or 3.8%, to 1.1 million, while Teikoku Oil, which will merge with Inpex, rose 52 yen, or 3.3%, to 1,624, as crude oil prices jumped 3.2% to close at $61.30 a barrel in New York.
And in the US yesterday, the Dow Jones Industrial Average index fell 10.81 points, or 0.10%, to end at 10,767.77, as investors reacted to the prospect of a rate increase from the Fed.
A nearly $2-a-barrel rise in crude oil prices was also a negative for the broader market, although it helped shares of energy companies, including Exxon Mobil.
Shares of Exxon were up 0.6% to $58.86, while ConocoPhillips fell 3% to $61.15, after sources said the No. 3 US oil company is in talks to buy independent natural gas producer Burlington Resources for more than $30bn.
Analysts expect the Federal Reserve to lift its benchmark fed funds rate for overnight bank loans to 4.25% at Tuesday's meeting of the policy-setting Federal Open Market Committee, but more importantly, they will be looking at language in the Fed statement for any indications of whether the Fed's long streak of rate increases will end soon.
Elsewhere, Wal-Mart Stores, added 1.3%, or $0.60, to end at $48.68, after reports the world's biggest retailer continues to be a profitable investment, while shares of Apple also rose 0.8%, or $0.58, to $74.91, after Credit Suisse First Boston raised its price target to $82 on the maker of the popular iPod music players.
And Pfizer gained 1.6%, or $0.32, to end at $20.94, after the world's largest drugmaker said it will increase its quarterly dividend, while Merck was one of the biggest drags on the Dow, with losses of 2.5%, or $0.72, to $28.41, after a judge declared a mistrial in the first federal lawsuit against Merck over the painkiller Vioxx.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7484 9558 or email [email protected].IFAonline
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