The top share index rose on Tuesday morning, led by integrated oils as supply concerns kept oil above $111 a barrel and investors cheered results from London's blue chips.
London's benchmark FTSE 100 index <.FTSE> was up 49.92 points, or 0.9 percent, to 5,721.01 by 9:23 a.m.
The FTSE 100 has ploughed back down through some significant technical levels such as the 20-day moving average (around 5,700), and an uptrend that began in November, suggesting the index might have formed a cap around the 5,800 level, said Jimmy Yates, head of equities at CMC Markets.
Equities have retreated from near overbought positions over the past twodays, according to relative strength index measures, easing selling pressure.
Integrated oils <.FTNMX0530>, which led the index lower on Friday and Monday, rebounded, supported as Brent crude rose above $111 per barrel on concerns over supply from Iran and South Sudan trumped worries about a global economic slowdown that could hit oil demand.
Miners <.FTNMX1770> rose too as Xstrata
Results also helped lift BSkyB
(BSkyB) beat across the board and those that sold into these numbers on expectations that they would disappoint will now look to buy back into the long term growth story, Atif Latif, Director of Trading Equities & Derivatives at Guardian Stockbrokers, said.
Better than expected fourth-quarter profit from ARM Holdings
The company, whose technology powers Apple's
And National Grid
In mainland Europe, among STOXX Europe 600 <.STOXX> companies that have reported quarterly earnings, 35 percent have beaten or met forecasts, Thomson Reuters StarMine data showed.
Robert Jaeger, senior investment strategist for BNY Mellon Investment Strategy and Solutions Group, said he was concerned investors were focusing too much on a prolonged flat-line recovery and upward movements on the back of positive surprises would be lost opportunities for those not properly positioned.
While other European banks rallied on improving sentiment surrounding a potential debt swap deal for Greece, pressure was on Britain's part state-owned banks Lloyds
Analysts said government ministers looking to intervene over those banks' bonus packages were impacting investor sentiment, while a bearish outlook from Santander UK
Domestic woes offset comments by Greek Prime Minister Lucas Papademos, who said negotiators had made significant progress in leveraging a deal for Greece that was needed before the troika can sign off on a second rescue package.
Bullish sentiment was also capped as investors focused on the next struggling euro zone periphery Portugal, which might need a second rescue as its borrowing costs soar.
(Written by David Brett)