The FTSE 100 rose 0.5 per cent to 6,837.61 points, as shares of natural-resources producers ticked up and utilities pushed higher, led by a five per cent surge in shares of British Gas parent Centrica. The FTSE’s move added to Monday’s jump of 0.9 per cent for the blue chip index.
Rallies in oil and utility stocks helped to support the market. Tullow Oil rose 6.1 per cent to retrace all of the previous session’s falls.
Traders said appetite was returning to the market for some of the worst-performing shares this year, with traders also speculating that tomorrow’s Budget may provide tax relief for the oil sector.
Sainsbury was one of the most heavily traded stocks on the FTSE 100, losing early gains to trade 0.8 per cent lower.
While investors viewed the company’s latest results as less negative than feared, it posted a fifth straight quarter of declining underlying sales. Jefferies cut its target price in light of the update.
The retailer traded 1.7 per cent of its 90-day average trading volume.
While it said it did not expect the trading environment to improve any time soon, it expressed confidence in its ability to outperform rivals.
“The worry for investors will be that the recovery process is not happening fast enough for Sainsbury’s, which should be in a position to react quicker than its peers,” Lewis Sturdy, dealer at London Capital Group, said in a note.
Tesco fell 1.7 per cent and Wm Morrison dropped 2.2 per cent, with traders saying that competition discounters Aldi and Lidl could increase pressure on their businesses.
Shares of Antofagasta were solidly lower, losing 2.8 per cent after the copper miner’s yearly net profit fell to $459.8m from $660m a year ago, missing expectations of $676m, according to a FactSet poll of analysts. The company reaffirmed plans to produce 710,000 tons of copper in 2015.
Shares of other mining and energy companies finished higher following recent declines for the sector.
Precious metal producer Fresnillo rose 1.6 per cent and diversified mining heavyweight BHP Billiton climbed 3.3 per cent. after it outlined plans for a $13bn spin off, South32.