FTSE gains as oil shares rise, update lifts HSBC

By Michael Taylor

LONDON, May 12 (Reuters) - Britain's leading shares edged up on Monday as heavyweight oil stocks rose on high U.S crude prices, while banking giant HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) gained after its update pleased investors.

At 0857 GMT, the FTSE 100 .FTSE was up 42.2 points, or 0.7 percent, at 6,246.9 after falling 1.1 percent in the previous session.

The UK's blue-chip index stayed higher after official data showed British factory gate prices and producers' costs rose at a record pace in April, as fuel and food costs soared.

"That sets the ball rolling for a week of detail as far as inflation is concerned in the UK and in the U.S.," said Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers.

Across the Atlantic, Wall Street fell on Friday, while Japan's Nikkei .N225 closed in positive territory for the first time in three days on Monday.

Heavyweight oil stocks dominated the UK upside as U.S. crude CLc1 remained at near-record levels. BP (BP.L: Quote, Profile, Research, Stock Buzz) was up 1.1 percent, Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) tacked on 0.5 percent, Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) climbed 3.7 percent and Tullow Oil (TLW.L: Quote, Profile, Research, Stock Buzz) was 3 percent higher.

BT Group (BT.L: Quote, Profile, Research, Stock Buzz) advanced 2 percent after the Sunday Telegraph reported it is in talks to sell its British data centres to the U.S. computer firm Hewlett-Packard (HPQ.N: Quote, Profile, Research, Stock Buzz) for 1.5 billion pounds ($2.93 billion). [ID:nL11106586]

BT declined to comment.