(Update at 16:23) Despite worries about the economic impact of hurricane Sandy, the FTSE 100 extended its morning gains into Tuesday afternoon trade, as bullish investors brushed aside some mixed economic news and focused on strong results from European companies including BP.
In Germany a report showed that unemployment has risen by more than expected, to 6.9%. In Spain, the government confirmed a third consecutive quarter of economic contraction, though the 0.3% decline wasn’t quite as bad as had been forecast.
In the US, where markets remained closed for a second day due to hurricane Sandy, a report on the housing sector came in better than expected.
In the UK, in thin trading BP rose by 4.5% to 444p after raising its dividend and beating profit forecasts, bettered only by a 4.7% gain from Man Group, taking the hedge fund group’s share price to 82p.
The broader London index rose by nearly 0.9% to 5,844.
(09:15) FTSE rises as defensives report strong earnings
The FTSE 100 added 0.58%, or 34 points, to 5,829 and the Mid-250 index inched ahead 0.3%, or 36 points, to 11,956.
BP added 15p, or 3.7%, to 440p to rise to the top of the FTSE 100, as it reported an increase in third-quarter profit and raised its dividend.
The oil company’s net income rose to $5.4 billion (£3.3 billion) from $5 billion (£3.1 billion) in the same period of 2011, and it increased the dividend by 12.5% to 9c (6p) a share.
Imperial Tobacco rose 48p, or 2%, to £23.78 as it announced an 8% rise in annual earnings after strong revenue growth in some of its major products.
Asian markets made small gains overnight as the Bank of Japan announced plans to extend its asset-buying programme by 11 trillion yen (£86 billion).
Trading volumes are expected to stay low today as US markets will remain closed after Hurricane Sandy hit the East Coast overnight, flooding large parts of New York City.
Lonmin (LMI.L), the platinum producer which has been at the centre of the strikes in South Africa, has announced plans for an $800 million rights issue (£498 million) to help it avoid breaching its covenants next year. Shares added 0.5p, or 0.1%, to 480.5p in early morning trade.
Stagecoach Group (SGC.L) shed 0.4p, or 0.15%, to 270p after reporting it is on track to meet its full-year pre-tax profit forecast and has seen strong growth in its North America division, up 10% in the five months to the end of September.