Strong BP results fuel FTSE to a one per cent jump amid weak volumes

BRITISH blue-chip index posted its biggest gain in two weeks yesterday after BP’s earnings topped forecasts, although volumes were among the lowest this year as US markets stayed shut.

BP shares topped the FTSE 100 gainers, jumping 4.2 per cent after the oil giant lifted its dividend and delivered better-than-expected third-quarter earnings.

The index closed up 54.80 points, or one per cent, at 5,849.90, its biggest one-day percentage gain since 16 October and more than reversing Monday’s fall of 0.2 per cent.

The heavyweight integrated oil and gas sector added 23 points to the FTSE, with miners adding another eight points. BP alone contributed 13.5 points to the index.

BP’s “results were much stronger than we and the market anticipated – almost entirely in refining and marketing where the clean result was $3bn versus our forecast of $1.8bn,” Investec said in a note.

Imperial Tobacco shares also gained, up 1.6 per cent as the cigarette group unveiled an eight per cent rise in annual earnings.

Some encouraging earnings reports from the Eurozone, including a 20 per cent jump in Deutsche Bank’s group profit, also helped sentiment.

The index rose on low volumes of a mere 55 per cent of the 90-day daily average as Sandy – one of the biggest storms on record – battered the US east coast, keeping Wall Street closed for a second day and suppressing trading activity.

Insurers, highly exposed to natural disasters, recovered after sharp falls on Monday on hurricane cost worries.

Admiral rose 0.6 per cent and the sector gained 0.9 per cent.