TULLOW OIL - worth another look?

FTSE closes sharply ahead

Headline shares closed comfortably higher today as the gas row between Ukraine and Russia helped fuel demand for energy stocks and the mining sector began the year in good form.

At the close of play, the FTSE100 was 62.7 points higher at 5,681.5 with the FTSE250 99 points better at 8,893.3 and the AIM100 up 68.5 points at 5,402.5. Volume was fair with 2.436 billion shares changing hands in 295,436 deals.

On Wall Street, US stocks edged lower following a disappointing December sales update from Wal-Mart and a price target cut on General Motors Corp weighing on the Dow Jones Industrial Average.

At London's close, the DJIA was 6.2 points lower at 10,711.3, while the Nasdaq fell 5.46 points to 2,199.86.

Back in London, miners were in demand as copper and gold prices continued to trade higher. Xstrata rose 60p to 1,420p, with BHP Billiton up 14p at 963.5p, Kazakhmys gaining 35.5p at 809p, Antofagasta 42p higher at 1,911p, Rio Tinto rising 48p to 2,703p and Anglo American 61p up at 2,040p.

Oil prices remained higher, with crude prices holding above 61 usd a barrel as concerns over Russia's gas row with Ukraine continued, despite assurances from Russia that it is in the process of restoring normal supplies to European nations.

BG Group continued to lead the FTSE100 risers, up 20p at 594.5p, while Cairn Energy gained 37p pence at 1,957p, Shell added 59p at 1,917p and BP moved up 18p to 637p.

Compass Group meanwhile, rose 6p to 226.5p on news Richard Cousins, the former head of BPB, may have been approached to become the new CEO of the embattled catering group, according to a report in today's Independent.

Retailers were under pressure amid concerns over trading during the festive period.

Footfall, the retail information provider, said the amount of people traipsing the high street between December 26th and 30th, normally the height of the post-Christmas sales season, fell by 12.4% compared with the equivalent period last year.

Marks & Spencer topped the blue-chip fallers with a drop of 8p to 497p, while Tesco slipped 6.25p to 325.25p. On the second line Woolworths fell 1.5p to 37.25p and Body Shop dropped 3p to 260p.

Electra Investment Trust led the mid-cap risers yesterday, up 84p at 1,204p, after agreeing to sell Inchcape Shipping Services, an independently managed network of ship agents, for $285m to Istithmar, a major investment house based in the United Arab Emirates.

Meanwhile, Rank Group dropped 11.75p to 294p on profit-taking following gains after the £430m sale of its Deluxe film processing division last week.

UBS today reiterated its neutral stance on the stock and lifted its price target to 297p from 288p previously.

William Hill was among the midcap risers, up 22.5p to 558p, after the bookmaker said profits for last year were likely to be above expectations as it looked forward to a strong 2006 boosted by the football World Cup.

Cookson Group jumped 13.5p pence to 438.5p after Numis Securities raised its target to 514p from 465p, while reiterating its buy rating, following the firm's recent disposal of its SCS unit.

In other news, Soco International surged 29p to 815p after finding oil in the first exploration well it spudded on the East Shabwa field in Yemen.

The hole, known as Jathma-1, flowed over 1,900 barrels of oil per day, Soco said in a bullish drilling update.

Panmure however, downgraded the shares to hold from buy on valuation.

Amongst smallcaps, Pan Andean shares dropped 1.25p to 9.75p after announcing that it has plugged its well in Texas as a reservoir encountered also contained water.

On the economic front, the UK's manufacturing sector continued to expand at a modest pace during December, but not nearly at the same rate as the 12-nation single currency zone, a closely-watched survey found today.

The purchasing manager index of activity in the monthly Chartered Institute of Purchasing and Supply survey rose to 51.1 in December from 51.0 in November.

Analysts had anticipated a modest decline to 50.8.

A reading above 50 indicates an expansion in activity, while a sub-50 figure indicates contraction.