FTSE firmer as oil shares gain; HSBC, retailers up

By Michael Taylor

LONDON, May 12 (Reuters) - The UK's blue-chip FTSE index .FTSE clung onto early gains on Monday as oil shares rose as crude prices stayed near record highs, an update from HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) pleased investors and bid talk buoyed retail stocks.

By 1121 GMT the FTSE 100 was up 23.8 points, or 0.4 percent, at 6,228.3, having hit 6,251.9, and was unaffected by data showing British factory gate prices and producers' costs rose at a record pace in April, as fuel and food costs soared.

Across the Atlantic, Wall Street stocks were set to open higher after Friday's losses, while Japan's Nikkei .N225 closed in positive territory for the first time in three days.

Heavyweight oil stocks continued to march higher as U.S. crude CLc1 remained at near-record levels. BP (BP.L: Quote, Profile, Research, Stock Buzz) was up 1.2 percent, Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) tacked on 0.8 percent. Among the smaller stocks, Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) climbed 4.6 percent to an all-time high of 35.12 pounds.

Also among advancing stocks, HSBC, Europe's biggest bank, said first quarter profit was ahead of a year earlier as growth in Asia and elsewhere helped counter another big hit for bad debts on U.S. home loans [ID:nL1269188]. HSBC rose 1.9 percent.

HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) added 0.6 percent and Standard Chartered Bank (STAN.L: Quote, Profile, Research, Stock Buzz) rose 0.5 percent, but Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) slipped 1.4 percent. Standard Life (SL.L: Quote, Profile, Research, Stock Buzz) rose 0.9 percent after Citigroup upgraded the stock to "buy" from "hold".

"We are certainly seeing a reflection of the power of sector weightings within the index," said Jim Wood-Smith, head of research at Williams de Broe.

"The weightings of oil stocks and miners is now so great (compared with) some fairly mundane looking moves at the individual stock level -- that it translates itself into a 50-basis-point rise in the whole index."