LONDON, Oct 24: Leading British shares closed higher on Monday, grabbing back part of last week’s steep losses as oil majors BP and Royal Dutch Shell bounced in anticipation of results this week, while caterer Compass Group gained on bid talk.

Compass, hit hard last week by news of a probe into its United Nations procurement procedures, was a frontrunner for much of the session, closing up 2.7 per cent on a report that a US based private equity company was considering a bid.

A spokesman for Compass, the world’s largest caterer, would not comment on a Sunday Times story that Clayton, Dubilier & Rice was eyeing the company.

The FTSE 100 index closed 65.5 points or 1.3 per cent higher at 5,207.6 in a rally many had seen as predictable in the wake of last week’s 2.5 per cent drop. Oils accounted for half the gains in the FTSE as BP and Shell rose 1.6 per cent each. Miners pushed the index up by around 10 points.

There’s been a registration over the weekend that what happened last week was really not precipitated by any hard news, just a kind of panic spreading, and the fundamentals remained what they were. That’s just driven things back up again, said Jim McCafferty, head of research at brokers Seymour Pierce.

A dip in oil prices below $60 a barrel as the latest hurricane missed Gulf of Mexico oil facilities and a strong start on Wall Street gave the UK market further support.

It was unquestionably oversold, but the US has had a good start, the oil price is still coming down, so we’ve had some fundamental reasons to go up, said a trader.

Dealers pointed out that volume at around 1.7 billion shares was light and raised some questions about the underlying enthusiasm of the buyers.

We’re still not out of the hurricane season yet. After the season they’ve already had there could be one or two more storms to come that could do damage to the oil installations, so things are very delicate at the moment, the trader said.

Mining shares packed the FTSE gainers’ list, with [Anglo American], Antofagasta and BHP Billiton up more than 3.5 per cent. Both companies are scheduled to update investors on output this week, and market watchers anticipate solid demand.

Miners have had a pretty brutal sell-off, so they were always going to bounce and lead the recovery, said the trader.

Traders said Anglo American’s 4.7 per cent jump was underpinned by news it would start a Chilean molybdenum plant ahead of schedule.

Cable & Wireless was among the handful of FTSE fallers, down 0.9 per cent as dealers reported negative sentiment weighing on the stock after BSkyB agreed to buy broadband Internet provider Easynet on Friday.

If Sky brings its not inconsiderable weight to bear on the broadband market, then things look worse for Cable & Wireless, one trader said.

Compass was not the only stock affected by bid talk. Mid-cap telecoms equipment maker Marconi rose after weekend media reports said Sweden’s Ericsson and France’s Alcatel were in a close race to buy the group. The shares added 1.8 per cent.

—Reuters