London afternoon: Shares extend gains

7th Dec 2010 14:23

With US stocks set to open high on the back of the tax-cuts deal between president Obama and the Republican party, London's blue-chips added to the morning's gains over the lunch time session.US president Barack Obama has said that he will agree to a two-year extension on tax-cuts from the Bush era in a compromise arrangement that bodes well for working relations between the two parties for the remainder of Obama's presidential term. Miners and oil stocks lead the risers in London as the price of crude cruises past the $90 per barrel mark. Antofagasta, ENRC and African Barrick are the pick of the miners, while Tullow Oil and Essar Energy lead the oil stocks higher.Resurgent oil giant BP is also firmer on reports that some of its assets in the North Sea are to next on the chopping block, as the company's asset sale programme continues.Meanwhile, good momentum across at its whole business helped supermarket giant Tesco, one of today's best performers, lift sales by 8.8% in the past three months, though its international businesses again led the way. The UK also picked up towards the end of the quarter.Elsewhere in the supermarket sector it has been a while since the frequently reheated rumour of the investment arm of the Qatari sovereign wealth fund reviving its interest in a takeover of Sainsbury but the story is doing the rounds again today, boosting Sainsbury;s share price in the process.Anglo-Dutch household goods and foods giant Unilever is sharply higher after Morgan Stanley upped its ratings on the shares by two notches.Plumbing supplies firm Wolseley, another strong performer today, said its first quarter trading performance was slightly ahead of expectations. Revenue in the three months ended 31 October rose 2% to £3,471m from £3,395m the year before. Like for like sales grew 4%.Engine producer Rolls-Royce has made its second contract win announcement of the week, this time it's a £20m deal to provide the design, propulsion systems and deck machinery for four deep water platform supply vessels.Standard Life has agreed to buy pensions and life product back office software group Focus Solutions through a £42m, 140p per share, all cash offer. Housebuilder Bellway expects net interim profits this year will be up by 20% on last year as buyer interest has picked up a little since the government's comperehensive spending review. Reservations are now ahead of the board's expectations, although still slightly down compared with the same period last year, while the decline in consumer confidence appears to have levelled out, it says.Electronic teaching aid designer Promethean World pulled out of its recent slump as Aberforth Partners raised its stake in the company above 3%. The shares have been under a cloud since slumping to a new low on Thursday of last week after a profit warning.At the company's AGM, Artisan (UK)'s chairman Michael Stevens said trading conditions are the toughest the residential and commercial property developer has ever faced. This has led to a drop in the Artisan share price of more than 10%.