FTSE makes gains ahead of central bank meetings

THE FTSE closed higher after a positive swing late in trading helped May start on a strong footing.

The index was supported by bumper profits by oil giant BP although a general softening across commodity firms meant the FTSE spent most of the session in the red.

A late Monday rebound in the US meant most other markets were primed for selling off at the start of play but sentiment improved ahead of key central bank meetings later this week.

The FTSE 100 ended the day up 16.78 points, or 0.22%, at 7,561.33 points.

Elsewhere in Europe, the situation was also mixed, with the French Cac down 0.2% and the German Dax increased 0.55% by the end of the session.

Across the Atlantic, the US markets made cautious gains at the start of the trading following a sharp turnaround on Monday from their lowest levels of the year, amid continued uncertainty over what to expect from the latest Federal Reserve meeting on Wednesday.

“Last time US stocks fell to these levels back in March a savage bounce followed, but earnings season has not really delivered enough good news for a rally to develop,” commented Chris Beauchamp, chief market analyst at IG.

Sterling edged higher after Tuesday morning’s surprise decision by the Reserve Bank of Australia to hike interest rates, before the Bank of England’s own decision on Thursday. The pound increased by 0.01% against the dollar to 1.251, and rose 0.08% against the euro to 1.188.

BP led the FTSE 100 after it notched up its highest quarterly underlying profits for more than a decade thanks to rocketing oil and gas prices. The oil major saw underlying replacement cost profits – its preferred measure – more than double to $6.2 billion (£5bn) for the first three months of the year from $2.6bn (£2.1bn) a year ago. BP was 22.7p higher at 414.25p at the close of play.

Aim-listed pharmaceutical firm Hutchmed plunged in value after it confirmed the US Food & Drug Administration rejected one of its cancer treatments. It said the FDA rejected its surufatinib for treatment of pancreatic neuroendocrine tumours, saying its Chinabased tests were not enough and said more US clinical trials were needed.

Hutchmed closed 37p lower at 208.5p as a result.

Investment management firm M&G climbed after brokers at HSBC raised the stock to a “buy” rating from “hold”. It closed 6.3p higher at 220.5p.

St James’s Place also improved, rising by 4p to 1,302p following its own upgrade from HSBC.

The price of oil came under pressure again due to concerns over Chinese demand, offsetting any benefit from Germany announcing it is in favour of an embargo on Russian oil imports. Brent crude decreased by 1.27% to $106.21 per barrel when the London markets closed.