Johnson Matthey led the blue-chip risers as traders looked to broker research for inspiration, with the platinum company’s shares hitting a record high after UBS raised them to its “buy” list.

According to the Swiss stockbroker, Johnson Matthey shares have lagged behind their sector by 15 per cent over the past year because of uncertainty about whether its car catalyst division will benefit from legislation to limit diesel emissions.

“The market wants to see the earnings acceleration before it pays for it,” Themis Themis-tocleous, a UBS analyst, told clients. However, with legislation already in place or at the planning stage, he argued, Matthey’s earnings look safe for growth of 13 per cent a year over the next five years.

“Higher growth is likely to come at a time when earnings for most companies in the sector could be either decelerating or even declining,” he said, seting a share price target of £18. The shares leapt 91p to £15.83.

Cazenove provided a counterpoint argument, forecasting only steady earnings growth. It reckoned that government measures were unlikely to convince Americans to part with their petrol pickup trucks in the numbers required and that research costs would be a persistent drag. “Negative news flow should drive the stock down in the short term, including German politicians resisting emissions legislation and poor US car data,” Rhian Tucker, an analyst, wrote in a note repeating an “underperform” rating. “We also expect further consensus down-grades for Johnson Matthey and the potential for upgrades to other European specialties as raw materials continue to ease.”

The FTSE 100 index climbed for a third straight day to finish 7.0 points firmer at 6,317.9 — just 1.1 points shy of the six-year closing high that it reached last month.

Oil stocks provided the backbone as cold weather in the United States lifted crude oil prices near $60 a barrel for the first time in four weeks.

BP, up 6½p to 541½p, also gained from a Goldman Sachs tip in advance of today’s full-year results. Moving to a “buy” rating, the bank said that BP could draw a line under recent troubles as the City is already expecting it to adopt more cautious production targets. For the longer term, Goldman did not believe market rumours that BP may pursue a break-up, a big acquisition or a mega-merger once Tony Hayward takes over as chief executive in August. Mr Hayward’s reputation as a salesman could lead to asset disposals, such as a spin-off for BP’s £10 billion exploration business, Goldman said.

Man Group, the world’s No 1 listed hedge fund manager, jumped 24p to 570¾p on word that it was recruiting up to five Wall Street banks to handle a flotation of Man Financial, its brokerage arm.

BT Grouprose 6¾p to 315¾p on an upgrade to “buy” from Dresdner Kleinwort Wasser-stein before results due on Thursday. Continued strength of the British economy should be good for BT earnings, while a more aggressive attitude to its balance sheet could be good for shareholder returns, Dresdner argued.

BT’s peer Cable & Wireless was ahead 2¾p to 174¼p after Credit Suisse sent round a note with a 200p target price.

Carnival, the cruise-liner company, was the sharpest faller, down 79p to £27.19 after its rival Royal Caribbean said that bookings for the January-to-March season, the busiest reservation period of the year, were not encouraging.

Bid approaches on Country-wide, up 27p to 562p, and Wilson Bowden, down 38p to £22.75, provided the excitement on the second line. The FTSE 250 index jumped 63.2 points to 11,406.50, a record high.

Croda was up 39½p to 620p. Morgan Stanley repeated an “overweight” rating based on restructuring potential after the chemicals maker’s acquisition of Uniqema from ICI.

New York: Blue-chip stocks eked out a slight gain as shares in IBM jumped after news that the technology group was shedding a stake in a Chinese computer maker. The Dow Jones industrial average closed up 8.20 points at 12,661.70.

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