London Report: Solid corporate earnings push FTSE near highs

THE UK’S blue chip share index hit a seven and a half week closing high yesterday, bolstered by upbeat corporate earnings reports from oil major BP and wealth manager St James’s Place.

BP, up 2.9 per cent, contributed most points to the UK benchmark index as it raised its quarterly dividend and said more share buybacks were on the cards. St James’s Place , which said it got off to a strong start in 2014, advanced two per cent.

“Investors are waiting to see the start of some positive earnings momentum, which has been missing in recent years. Any sign of a positive momentum is likely to support share prices,” James Butterfill, global equity strategist at Coutts, said.

The FTSE 100 ended up 69.75 points, or one per cent, at 6,769.91 points, its highest close since 6 March.

Barclays Capital analyst Lynnden Branigan said that the close above 6,706, the level which marked the top of the range in recent weeks, could pave the way for the index to rise to the high seen on 4 March, at 6,827.

Shire, the top blue-chip percentage gainer for much of the session, turned negative in afternoon trade.

Traders attributed the turnaround to a report that Botox-maker Allergan, which had been rumoured to be interested in buying the British drugmaker, is instead looking to sell itself.

Allergan is exploring a sale to Sanofi or Johnson & Johnson in order to fend off a takeover bid by Valeant, Bloomberg reported, citing people with knowledge of the matter. This would rule out a purchase of Shire.

But traders remained bullish on Shire, up about 15 per cent over the last two weeks on speculation it has been rebuffing approaches from US rivals such as Allergan, alongside a burst of deal-making and bids in the healthcare industry.

Its shares, which tested record highs hit in March earlier in the session, fell 0.7 per cent.

“I think any dip’s going to be short-lived because the sector’s quite interesting at the moment,” said Manoj Ladwa, head of trading at TJM Partners.

Worries about Ukraine moved to the back burner, for now, after the United States and European Union imposed more sanctions on Russia for its role in backing the separatist movement in eastern Ukraine.

The FTSEurofirst 300 index of top European shares provisionally closed up 1.2 per cent at 1,352.41.