Britain's top share index ended slightly higher on Thursday, recovering from earlier losses, as a late rally in crude oil prices boosted energy stocks and telecom firm BT Group advanced after its strategic acquisition of mobile operator EE. The UK Oil and Gas index rose 1.2 percent after crude jumped about 5 percent on falling output and rising violence in Libya.
-- Energy shares up on late rally in crude oil
-- BT advances after confirming deal for EE
"Valuations are beginning to look more attractive and could give rise to merger and acquisition activities in the energy sector. Investors are looking to take advantage of any rise in crude oil prices," Securequity sales trader Jawaid Afsar said.
The bluechip FTSE 100 index ended 0.1 percent higher at 6,865.93 points after falling to an intra-day low of 6,808.19 points earlier in the session. Energy companies featured among the top gainers, with shares in Tullow Oil, BG Group and Weir Group rising 2.3 to 5.6 percent. "With a surge in oil prices, people have been buying oil-related stocks to benefit from the intra-day price moves," Tom Robertson, senior trader at Accendo Markets, said.
"We'll have to wait to see if the oil price settles, but whilst this uncertainty in oil continues, the related companies could be ideal intraday trading candidates." The FTSE 100 index was also supported by a 4.5 percent rise in BT to a 14-year high after it agreed a 12.5-billion-pound ($19-billion) deal for EE. However, investors stayed cautious due to jitters in Greece after the European Central Bank hardened its financing rules for Greek banks, sending their shares sharply lower and dragging down regional stock markets.
The ECB abruptly cancelled its acceptance of Greek bonds in return for funding, shifting the burden onto Athens' central bank to finance its lenders and isolating Greece unless it strikes a new reform deal. "The ECB is trying to keep Greece in line by cancelling its acceptance of Greek government bonds in exchange for funding, and this has sent a ripple through equity markets. The ECB is showing Athens who is boss," IG analyst David Madden said.
People familiar with the matter said Greece's central bank has been given the green light to provide Greek banks with roughly 60 billion euros of emergency liquidity. The ECB declined to comment. Among other sharp movers, Drugmaker AstraZeneca fell 3.4 percent, the top faller in the FTSE 100 index, after saying its fourth quarter results missed expectations. However, mid-cap company Rexam surged 20 percent after saying it was in talks to be potentially bought by US rival Ball Corp in an offer that values the company at about 4.29 billion pounds ($6.54 billion).