* FTSE 100 steady after best month since May
* BP rises to 3-year high after earnings beat
* WPP brushes off guidance cut
* Bookies shrug off govt mulling cut to bet sizes (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
By Danilo Masoni and Helen Reid
LONDON/MILAN, Oct 31 (Reuters) - Britain’s FTSE sealed its best monthly gains since May on Tuesday as a series of upbeat earning updates including from oil major BP helped it rebound and end October on a high.
The internationally-exposed FTSE 100 inched up 0.1 percent, closing at 7,493.08 points after a 0.2 percent fall on Monday when strength in the pound ahead of this week’s Bank of England policy meeting weighed.
The stock index ended October up 1.6 percent, its best month since May, when the election of President Emmanuel Macron in France sent stock markets across Europe soaring.
Voracious global appetite for equities has helped boost British stocks to a new record high this month.
But investors have their eyes firmly glued to the Bank of England’s policy meeting this Thursday, at which it is expected to raise rates for the first time since 2007.
The potential start of a hiking cycle combined with resurgent inflation could disrupt the post-Brexit vote boost that equities have enjoyed from a weaker sterling, UBS said.
“Weaker sterling will likely fail to support UK equities in the period ahead,” UBS macro strategist Yianos Kontopoulos said in a note.
JP Morgan was also downbeat on UK equities, saying the market underperforms in rising rate environments. “We remain underweight the UK, expecting it to stay the biggest laggard regionally,” analysts said in a note.
But upbeat results helped maintain the mood on Tuesday.
BP shares closed up 1.7 percent after earlier hitting their highest level in three years after a strong update.
The oil major said it would resume share buybacks after reporting a doubling in third-quarter profit in the clearest sign yet that the oil company is confident about a rebound.
“The turnaround in BP’s fortunes since 2010 has been a very long road and CEO Bob Dudley has managed to navigate a very tricky road,” Michael Hewson, Chief Market Analyst at CMC Markets UK, wrote in a note.
Gains in BP were mirrored by strength in Royal Dutch Shell , up more than 1 percent, making energy the biggest lift to the FTSE.
Elsewhere, chemicals maker Croda was the second biggest gainer on the FTSE, up 4.2 percent after a trading update.
WPP recovered from early falls to close up 2.8 percent after the world’s biggest advertising company lowered expectations for full-year organic net sales and profit margin - two months after an earlier downgrade sent shockwaves through the industry.
After an initially downbeat reception, the market’s focus turned to better than expected quarterly net sales performance. Liberum said the guidance cut was partly expected and would not impact consensus earnings too much.
“We remain positive on the longer-term fundamentals but sentiment is likely to be subdued until WPP can stop the downgrade cycle,” it said in a note.
Just Eat rose 5.4 percent after the takeaway ordering website raised its full-year revenue guidance for the second time in four months after reporting a 47 percent increase in its latest quarter on the back of strong order growth.
Among mid caps, Weir Group slumped 6.8 percent. The maker of pipes and valves for mining and energy industries lowered its full-year operating profit forecast due to higher costs and investments in its mining business.
Overall the FTSE 250 eked out a 0.1 percent gain.
Shares in bookmakers Ladbrokes Coral and William Hill rose 1.7 and 2.3 percent respectively, shrugging off news that the maximum stake on gambling machines in betting shops could be sharply cut in response to concerns that the terminals fuel addiction.
The top stake could be cut from 100 pounds to between 50 pounds and as little as 2 pounds, the government said, starting a 12-week consultation period. Analysts at Barclays said it believed a cut to 2 pounds was not the most likely outcome.
Reporting by Danilo Masoni and Helen Reid,; Editing by Mark Heinrich