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London stocks rise on recovery hopes; BP top drag on weak earnings

Shashank Nayar, Amal S and Shivani Kumaresan
·2-min read
FILE PHOTO: A street cleaning operative walks past the London Stock Exchange Group building in the City of London financial district, whilst British stocks tumble as investors fear that the coronavirus outbreak could stall the global economy, in London

By Shashank Nayar, Amal S and Shivani Kumaresan

(Reuters) - London shares rose on Tuesday, following optimism about economic stimulus and a faster global recovery, while oil manufacturing major BP dropped after reporting weak earnings.

The blue-chip FTSE 100 index rose 0.8%, with financial stocks, mainly HSBC Holdings and Barclays PLC leading the gains. The mid-cap index added 1.5%.

BP fell 4.5% to the bottom of the FTSE 100 as its profit in the last quarter of 2020 sunk to $115 million on weak energy demand.

"Supporting a more positive mood was an apparent calming of the Reddit-inspired frenzy on markets as well as hopes for a vaccine-led exit from lockdown," said Russ Mould, investment director at AJ Bell.

"In the short term a lot of attention will be across the Atlantic with more big U.S. corporate names reporting and continuing focus on the progress of new President Joe Biden’s coronavirus relief package."

Britain began door-to-door testing to curb the spread of a highly-infectious variant of the novel coronavirus, while the country's house prices fell for the first time in seven months in January, mortgage lender Nationwide said.

Global stock markets gained for a second day, ahead of negotiations between U.S. President Joe Biden and Republican senators on a new COVID-19 support bill. [MKTS/GLOB]

The FTSE 100 has recovered nearly 30% from its March 2020 lows and is 15% away from its highest point last year, led by stimulus support and re-opening optimism, but a surge in infections and lockdowns have slowed growth.

Commodities trader Glencore fell 1.2% after appointing Cynthia Carroll, the former chief executive officer of London-based miner Anglo American, to its board of directors.

Lender Virgin Money gained 7.7% as it reported a modest increase in the number of customers and provided a further 726 million pounds ($992.59 million) to protect its balance sheet.

(Reporting by Shashank Nayar, Amal S and Shivani Kumaresan in Bengaluru; editing by Uttaresh.V and Barbara Lewis)