Britain's top share index moved higher on Wednesday, with banks up after better-than-expected results from US peer J.P. Morgan provided hope that the earnings season might hold some more positive surprises. "There is a long way to go, but the earnings compass has swung back to positive today, helping fuel the market rally.
However, with low volumes and the Easter holidays approaching, the needle is likely to continue to bounce around," said Mic Mills, head of electronic trading at ETX Capital. At the close, the FTSE 100 was up 45.97 points, or 0.8 percent at 6,010.44, recouping half of Tuesday's 1.5 percent drop and recapturing the 6,000 level. Banks provided the main support as J.P. Morgan saw its first-quarter EPS top analysts' forecasts, with closest British peer Barclays taking on 1.6 percent.
Lloyds Banking Group rose 0.6 percent after recent falls, helped by positive comment from UBS, which added the bank to its "key calls list" on valuation grounds. Lloyds shares had hit nine-month lows to trade below its 20-day moving average after an Independent Commission on Banking proposed the sale of hundreds more of its branches. Integrated oils rose, led by Royal Dutch Shell ahead 0.8 percent, as crude prices rose after two days of losses.
BP added 0.9 percent ahead of its annual general meeting on Thursday, shrugging aside concerns over its share swap deal with Russia's Rosneft. Miners were mixed after falls on Tuesday when Goldman Sachs said the recent rise in commodity prices had run its course. Rio Tinto added 0.1 percent recovering from an initial fall after a production update.
Chip designer ARM Holdings was the top FTSE 100 gainer, ahead 6.8 percent, with traders citing a bullish note from Morgan Stanley. Following a presentation by Microsoft in Las Vegas, showcasing a version of Internet Explorer 10 running on an ARM-based processor, traders said the broker was "positively surprised that software development is already well advanced".
And consumer products firm Reckitt Benckiser rose 4.2 percent after Bernstein upgraded its rating, and J.P. Morgan raised its earnings estimates, arguing that valuation is compelling. On the downside, insurer Old Mutual fell 4.3 percent as it traded ex-dividend, and with technical analysts at Charles Stanley suggesting the stock is likely to remain under pressure.
Overall ex-dividend factors knocked 2.43 points off the FTSE 100 index on Wednesday, with Aggrek, BG Group, Capita, IMI, Tullow Oil, and John Wood Group all losing their payout attractions. On the economic front, Britain's jobless rate fell unexpectedly in the three months to February, as did average earnings on an annualised basis.