Britain's leading FTSE 100 share index edged up on Tuesday, with banks forging higher after Barclays' results and dividend signalled the worst may be over for the stricken UK financial sector. The FTSE 100 ended up 0.3 percent, or 20.3 points at 5,966.9.
Shares across Europe ended little changed as investors balanced the Barclays update with a shock writedown at Swiss bank Credit Suisse. Barclays raised its writedown on the value of risky assets to 1.6 billion pounds ($3.12 billion) but its shares jumped 3.7 percent on upbeat comments from management on a conference call as well as annual profit that met forecasts.
Barclays is the first major UK player to report earnings after a turbulent year and analysts said Tuesday's numbers - including a modest 300 million pound ($584 million) increase in writedowns and a 10 percent dividend increase - were good news for the sector.
"I feel fairly confident that the rest of the banks that are due to report will follow in Barclays' footsteps...in terms that there are no further losses to be reported beyond what they told us in December," said Edward Menashy, an economist at Charles Stanley.
"The fact that the bank felt confident enough to declare an increase in the dividend (has) really stabilised the situation." Shares in Royal Bank of Scotland, Lloyds TSB and HBOS advanced between 1.6 and 3.1 percent. InterContinental Hotels soared 7.3 percent after the world's largest hotelier met forecasts with an 18.5 percent rise in annual profit. Capping gains, index-heavyweight Vodafone fell 2.2 percent after Goldman Sachs cut its price target on the mobile phone giant.
Cadbury Schweppes shed 5.4 percent as analysts cited investor disappointment at the lack of a capital return in the planned demerger of its North American beverage business. Centrica dropped 0.9 percent. The British Gas owner said it was interested in buying a majority stake in Belgium's Distrigas from French utility Suez.
Energy shares pushed higher as US crude oil prices rose, with oil major Royal Dutch Shell up 1.2 percent and its rival BP rising 0.6 percent. Oil rose to the highest level in a month, above $98 a barrel, driven by expectations that supplies will be tight.
Rising copper prices supported miners, with Antofagasta up 5.2 percent, Kazakhmys rising 3.7 percent and BHP Billiton up 2.4 percent. Pharmaceuticals, a defensive sector battered recently on concerns of generic competition and drug safety issues, were back in demand, with Shire rising 1 percent, AstraZeneca up 1.2 percent, and GlaxoSmithKline tacking on 1.4 percent.