Shares surge in Roll-Royce and BP with blue chip index on the up
London's blue chip index ended the day higher thanks to strong earnings from the likes of engineering firm Rolls-Royce and oil giant BP.
The FTSE 100 rose 0.7% or 51.66 points to 7,423.66p, after Rolls-Royce Holdings shares surged more than 10% or 91p to 979p, and shares in crude producer BP rose 10.65p to 456.45p.
Investors were celebrating news of a jump in large engine deliveries, which helped Rolls-Royce swing to a half-year pre-tax profit of £1.94 billion, having suffered a £2.15 billion loss over the same period last year.
David Madden, a market analyst at CMC Markets UK, said: "Rolls Royce shares have rocketed higher today on the back of profits more than doubling, and coming in higher than dealers anticipated."
He added that "it is encouraging to see the company improve efficiency, but it is worth pointing out that a portion of the jump in profit was down to currency movements, so the numbers aren't as glowing as they seem".
There was also enthusiasm for BP's recovery, having recorded half-year profits of 1.6 billion US dollars (£1.2 billion), compared to a 2 billion US dollar (£1.5 billion) loss for the same six months in 2016, amid a major turnaround plan meant to cope with the oil price downturn.
Sterling's performance was mixed, with the pound flat against the US dollar at 1.320, and up 0.3% versus the euro at 1.119.
Across Europe, the French Cac 40 and German Dax ended the day up 0.65% and 1.1%, respectively.
Brent crude prices plunged 2.9% to around 51.09 US dollars per barrel, after a Reuters survey showed that oil output from Opec members actually rose in July, despite commitments to cut production in hopes of tackling the global glut.
In UK stocks, Centrica shares jumped 4.5p to 203p following announcements British Gas will hike electricity prices by 12.5% for 3.1 million customers in September, saying it was currently selling electricity at a loss.
British American Tobacco climbed 118.5p to 4,832p despite news the company is now facing an investigation from the Serious Fraud Office linked to allegations that it paid bribes in East Africa.
Shares in Taylor Wimpey rose 3.6p to 194p after reporting that pre-tax profits rose 25.7% to £335 million when stripped of a £130 million provision meant to to help customers hit by a leasehold scandal,
Pastry maker Greggs shares were up 29p to 1,129p on news that like-for-like sales rose 3.4% in the first half of this year, thanks to a strong customer appetite for salads and breakfast food.
AA plunged 34.3p to 210p following an announcement that the roadside recovery firm had sacked executive chairman Bob Mackenzie for gross misconduct, but declined to give more information.
The group added that first-half performance has been hit by "erratic workload patterns", as it failed to adequately book roadside patrols to match demand.
The biggest risers on the FTSE 100 were Rolls Royce up 91p to 979p, Intertek Group up 394p to 4,695p, Direct Line Insurance up 20.4p to 395p, and International Consolidated Airlines Group up 19.5p to 597.5p.
The biggest fallers on the FTSE 100 were Fresnillo down 40p to 1,496p, Mediclinic International down 15p to 725p, Astrazeneca down 79p to 4,490p, and Johnson Matthey down 46p to 2,764p.