BP profits boost FTSE; US shares also see uptick

Better-than-expected profits from blue chip heavyweight BP helped the London market bounce back after yesterday’s eurozone worries.

Strong corporate results in the UK and US gave investor sentiment a boost, with Wall Street also enjoying gains after robust earnings from the likes of Kellogg saw the Dow Jones Industrial Average rise 0.8% in early session trading.

A 2% hike in shares put BP among the day’s biggest risers, while the wider FTSE 100 Index lifted 47.5 points to 6294.4.

It came as a marked recovery after yesterday’s 100 point slump, which ended the market’s spectacular new year rally.

The more buoyant mood was helped by further figures suggesting that the UK economy might avoid a triple dip recession, with a purchasing managers’ survey for the services sector recording a rebound in January activity.

And there was better news from Europe after a survey of the manufacturing and services sectors showed activity rose to a 10-month high in January across the 17-country eurozone.

This helped the German DAX and France’s CAC 40 also return to positive territory.

World markets had fallen on Monday amid signs that Silvio Berlusconi’s right-wing coalition might be gaining ground ahead of Italy’s general election at the end of this month, and after the Spanish government became embroiled in a corruption scandal over alleged secret cash payments.

Among stocks in London, BP added 7.7p to 469.7p after it posted better-than-expected fourth quarter profits of €4bn.

ARM Holdings, whose chip designs are used in Apple products, was also near the top of the risers board after it posted fourth quarter results ahead of market expectations. Shares were 33.75p higher at 925.75p.

Banking shares were back in favour today after losses yesterday following Chancellor George Osborne’s speech, which confirmed lenders would be threatened with break up if they did not adhere to new ring-fencing rules.

Barclays shares were 3.9p higher at 295.4p, despite upping its provision for redress relating to mis-sold payment protection insurance and interest rate hedging products sold to small and medium-sized businesses by £1bn.

Royal Bank of Scotland was 9p higher at 337.6p as investors waited for news of its fine over the Libor rate-rigging scandal, expected this week.

Outside the top flight, shares in broadband group TalkTalk Telecom fell 5%, down 12.15p to 241.25p, despite reporting further progress in its recovery plan, with full-year results expected to be in line with recent guidance.