BP led a fresh rally for the FTSE 100 Index yesterday as higher oil prices and the potential resumption of dividend payments cheered investors.

Buoyed by the three per cent rise for the oil stock, the FTSE started the new quarter where it left off after its best September in 13 years.

Gains for other commodity stocks and a five per cent rise at gas exploration group BG, amid fresh takeover speculation, meant the FTSE 100 Index closed 44.3 points higher at 5592.9.

The resources sector was lifted by figures pointing to stronger growth in Chinese manufacturing, suggesting the country is not slowing as sharply as feared.

The economic picture in the US was more mixed as evidence of weaker activity among industrial firms was offset by data showing a slight improvement in consumer sentiment and spending.

With investors clinging to hopes of recovery, oil prices climbed above 80 US dollars a barrel for the first time in six weeks, leading to gains of 31p to 1888p for Royal Dutch Shell and a 34p improvement to 1308p at Tullow Oil.

Shell has been mentioned as a potential suitor for BG Group, which topped the risers’ board with a gain of 51.5p to 1170p.

New chief executive Bob Dudley’s first day as BP boss following the departure of Tony Hayward went well as shares rose 12.7p to 440.5p. Investors were encouraged by his comments that BP’s board will consider the return of the company’s dividend early next year.

The rise came as BP said the clean-up bill for the Gulf of Mexico oil spill now stood at 11.2 billion US dollars (£7.1bn).

Elsewhere, Marks & Spencer, which is due to post a trading update next week, rose 3.5p to 391.6p and Tesco lifted 4.1p to 428.1p ahead of half-year results on Tuesday.