UK shares rebound led by energy rises despite thin trading volumes

Shares rebounded from early falls for the second session in a row yesterday, with a rising oil price supporting energy stocks to lead British blue chips higher.

The FTSE 100 index gained 3.93 points, or 0.1 per cent, to finish at 5,752.03 points in thin trade of only 85 per cent of the average 90 day volume.

Energy stocks added five points to the index, supported by a spike in the oil price, which gained more than $1 (63p) after a bomb blast in Tel Aviv threatened to derail hopes for a truce between Israel and Palestine and raised the prospect of a wider regional conflict. “We have seen in the last couple of hours people coming in for the energy names, albeit in low volumes,” Steve Asfour, head of sales trading at Fox Davies Capital said.

One such stock was BG, which led FTSE 100 gainers, rising 2.8 per cent. The gas company had shed over a quarter of its value in less than a month after forecasting no growth in 2013 in a trading update. Utilities also supported the rise, led by a 1.9 per cent rise in United Utilities after a clarification by sector regulators struck a more conciliatory tone.

Basic materials suffered, with miners losing 0.5 per cent as growth worries hit commodity prices.

The copper price fell 1.3 per cent as the Federal Reserve chairman cautioned over the prospect of growth in the United States given tricky fiscal negotiations, and Greece's international lenders failed to agree on an aid package for the country. UK stocks dropped three per cent last week but their losses were mostly reversed on Monday.