Britain's FTSE rebounds, fuelled by upbeat earnings

Tue Feb 5, 2013 7:10am EST

* FTSE 100 up 0.7 percent

* BP adds most points after beating expectations

* Index bounces back after biggest fall for three months

By Alistair Smout

LONDON, Feb 5 (Reuters) - Britain's top share index rebounded on Tuesday from a steep fall in the previous session, as investors switched their focus from euro zone worries to a generally solid set of company updates.

At 1137 GMT, the FTSE 100 was up 0.7 percent at 6,287.69, a day after suffering its biggest one-day fall in three months as political uncertainties in Europe and a string of analyst downgrades sparked profit taking from 4-1/2-year highs.

Oil heavyweight BP added more than 5.5 points to the index after strong fourth-quarter figures.

"The likes of BP have come in and beaten expectations, and by a comfortable margin too," Alastair McCaig, market analyst at IG Index, said.

"...The market has pretty quickly shrugged off the negativity of yesterday. We've been through a month where equity markets have once again shown their popularity with investors."

In January the FTSE 100 posted its strongest start to the year since 1989, rising 6.4 percent.

Other corporate results also helped fuel further gains on Tuesday, with chip designer ARM up 3.7 percent after fourth-quarter profits that beat expectations.

But oil and gas firm BG fell 2 percent after it said it would miss 2015 production targets.

MIXED EARNINGS SEASON

The fourth-quarter earnings season in the UK is a third of the way through, and has so far been mixed, with 50 percent of the FTSE 100 companies to report so far beating or meeting expectations as some have struggled with weak growth.

But firms such as BP beating expectations during a fourth quarter in which the UK economy shrank demonstrates that many larger companies are resilient to dips in the domestic economy.

"The UK market has lots of quality large multinationals, and to some extent it has been insulated from what's been going on in the UK domestically," said Sandra Crowl, investment committee member at Paris-based asset management firm Carmignac Gestion.

"We have got investments in the UK in chemical companies, in energy companies, and these companies in particular have got quite a deal of their revenues coming from outside of the UK." (Editing by John Stonestreet)