* FTSE 100 up 14.12 points at 6,451.62
* BP rises after winning legal dispute related to oil spill
* Aviva rises after getting more than expected for U.S. unit
By David Brett
LONDON, Oct 3 The UK's leading shares held onto
gains by midday Thursday, boosted by heavyweight BP which won a
rare legal battle related to its oil spill in the Gulf of
Mexico, but U.S. debt worries continue to dent the index's
Energy firm BP - the UK's fifth biggest company by
market capitalisation - rose 0.9 percent after it won a legal
reprieve in a settlement related to the 2010 Gulf of Mexico oil
spill, potentially sparing the oil company billions of dollars
of extra costs.
More broadly the FTSE 100, which was up 14.12 points
at 6,451.62, by 1031 GMT, has remained stuck in a 200-point
range since the start of August.
"At the moment there is no incentive to make investment
decisions given the backdrop," Keith Bowman, analyst at
Hargreaves Lansdown, said
"Investors are trying hard not to become flustered and
panicked by what is happening in the background but is there
really any incentive to make new investments?"
The index has back-tracked since hitting 13-year highs in
May and is 5.6 percent off that level as investors wait for
corporate earnings, which are still in downgrade territory, to
catch up with the index's re-rating. The FTSE 100 trades on a
12-month forward price-to-earnings ratio around 13 times, above
its 10-year average.
"We went below 6,400 and bounced from yesterday's lows, and
since then we've had rising lows, which is good to see," Mike
van Dulken, head of research at Accendo Markets, said.
"But for a breakout, we need to get back towards 6,520 ...
(The index is) still under pressure, and we might stay in a
range until we get something major from the U.S. to get
sentiment going again."
Equity markets have been capped by the budget deadlock that
has shut parts of the U.S. federal government and there was no
breakthrough in negotiations on Wednesday.
Some British stocks still managed decent gains, with insurer
Aviva up 1.4 percent after the sale of its U.S. unit
fetched $800 million more than expected.
Tesco rebounded 1 percent and was the second most
heavily traded stock after mixed broker coverage after
Wednesday's report of a plunge in profits prompted big falls in
that day's session.
Traders said that an upgrade to the stock by Citi to
"neutral" from "sell" was helping to counteract downgrades from
"There were very few points of light in Tesco's results...
so why upgrade now? Simply stated, we fail to see much
misperception about the company," analysts at Citi said in a
(Editing by Stephen Nisbet)