London shares gains on upbeat earnings

London's stock market rose to two-month highs on Thursday on upbeat British company results. FTSE 100 index of top companies rose 0.43 per cent to close at 6,808.87 points after reaching a two-month intraday high at 6,811.64. Most of Europe’s main stock markets were closed on Thursday for the May Day holiday. Indices had closed mixed Wednesday on news of a surprise slump in US economic growth. “As mainland Europe takes a lie-in to celebrate May Day, the FTSE 100 has done its best to keep us entertained,” said analyst Will Hedden at trading house IG. “Household names Lloyds and BSkyB are putting smiles on the faces of equity investors today, both impressing with their updates.”
- Lloyds bank shares surge -
Britain’s bailed-out Lloyds Banking Group led the FTSE higher after posting a sharp rise in underlying in the first quarter, boosted by falling impairments, cost-cutting and the broader economic recovery. The news sent LBG shares rallying 5.49% to 79.5 pence. Elsewhere, BSkyB jumped 2.33% to 900.50 pence after the broadcaster posted rising revenues for the nine months to the end of March. The television sector won another boost from news that US entertainment giant Viacom has agreed to buy Britain’s Channel 5 from the Northern and Shell media group for £450 million. On the downside, Rolls-Royce shares fell 0.95% to 1,040 pence after the engine-maker warned over profits at its marine division. Profits and sales are expected to flatten this year as government cutbacks on defence spending ends the company’s decade of rampant growth. Shares in Reckitt Benckiser gained 2.26% to 4,883 pence, one day after the household goods group ended talks over a possible offer for the consumer health unit of German drugs giant Merck.
- Heritage Oil facing takeover -
Over in the resources sector, shares in energy explorer and takeover target Heritage Oil slipped 0.22% to 314.5 pence on London’s second-tier FTSE 250 index. The stock had spiked by 23.32% on Wednesday after the Africa-focused group agreed to a $1.55-billion takeover from Qatar’s Al Mirqab investment fund, pitched at 320 pence per share, according to AFP.