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Rebound in oil prices and strong bank results give FTSE a one per cent boost

RECOVERING oil prices fuelled a one per cent rise in energy stocks and banks also gained to push Britain’s top share index one per cent higher by yesterday’s close.

The FTSE 100 index ended up 55.78 points at 5,783.69, having closed down 0.3 per cent on Monday. The index is up 6.9 per cent this year after a 22 per cent rise in 2009.

Goldman Sachs and Bank of New York Mellon both reported forecast topping quarterly earnings, adding to investor conviction that the recovery from is gathering pace.

Energy stocks delivered the biggest lift for the index as crude prices rebounded, supported by improving risk appetite and as some European airports reopened after five days of air traffic interruptions by a volcanic ash cloud.

BP, BG Group, Royal Dutch Shell and Cairn Energy added 0.7 to 3.2 per cent.

The UK’s Financial Services Authority caused investors jitters when it announced a formal probe into Goldman Sachs and the bank’s share price struggled despite the strong results. However banks recovered as US bank results showed the sector as a whole is in good shape.