The FTSE slumped below the 5,900 mark this morning on continued Middle East unrest fears, but recovered ground after a boost to Wall St.
The FTSE 100 still closed the day below 6,000, though, 0.35 per cent down at 5,914.89. It has lost ground in eight of the last nine sessions.
Michael Hewson said the morning’s performance was due to a “toxic combination” of higher oil prices driving inflationary pressures and fears for global economic growth prospects.
At its intraday peak, Brent crude for April delivery traded at $117.81 a barrel on reports of Libyan government counter-attacks on rebel-held towns in the country’s east that heightened fears of a civil war in the world's 12th-largest oil exporter.
The day’s biggest gainer was outsourcing firm Serco, which closed up 4.6 per cent to 579.5p after it posted what Shore Capital called "solid" full-year results. Shore Capital repeated its "buy" rating on the stock.
Standard Chartered finished up 4.33 per cent at 1,688p after it posted a 19 per cent rise in profits and said it was off to a record start this year as China, India and other Asian markets boomed.
The uplift led Lloyds Banking Group into the top ten risers to close up 1.59 per cent at 62.73p, while Barclays also rose on the news.
Mining company Vedanta Resources closed up 2.11 per cent at 2,419p while Cairn Energy rose 1.84 per cent to end at 438.4p after the Indian government said there should be no problem with its $9.6bn (£5.9bn) acquisition of Cairn’s India business.
Pub chain Whitbread was the sharpest faller, on high volume, down 4.5 per cent after it reported a slowing rate of sales growth at its Premier Inn budget hotel chain.
“Disappointing sales at Premier Inn have weighed on sentiment, as did the purchase of self-service coffee bar Coffee Nation for £59.5m,” Hewson said.
Car insurer Admiral saw 2010 profits rise 23 per cent, driven by the core UK motor insurance business, but its shares fell 3.1 per cent to end at 655p as investors questioned its business model.
Rio Tinto, RSA Insurance, and Diageo all fell after going ex-dividend.
Travel stocks slipped back with TUI Travel the biggest faller, though British Airways owner IAG bucked the trend after being upgraded to a “hold” by Charles Stanley with a price target of 210p.
On the FTSE 250, ITV gained 9.3 per cent to 93.45p after pledging to pay an interim dividend. Its profits rose almost 200 per cent last year after hefty cost cutting and an upturn in the advertising market.
Wall Street was boosted by the release of the latest ADP Employer Services report, which monitors private job creation and showed that employment grew more than expected, by 217,000, in February.
The Dow Jones industrial average gained 8.78 points, or 0.07 per cent, to 12,066.80. The S&P 500 Index gained 2.11 points, or 0.16 per cent, to 1,308.44. The Nasdaq Composite Index gained 10.66 points, or 0.39 per cent, to 2,748.07.