Global markets continued their recovery from last week's wave of selling as solid corporate earnings and a better than expected industrial confidence survey in Germany helped boost spirits.
The pound recovered against the dollar and the euro, while crude oil prices firmed with Brent futures trading at $54.80/barrel.
UK stocks built on Monday's strong close with a 1.4% gain in the FTSE 100 index to 7,427 points early on Tuesday, led by Energy and Mining companies.
Oil major BP (BP.) was the biggest points contributor to the rally after it pleased the market with fourth-quarter operating earnings of $2.57bn, above consensus estimates of $2.1bn, and an increase in the dividend.
On his last day in charge, chief executive Bob Dudley said 'BP is performing well, with safe and reliable operations, continued strategic progress and strong cash delivery. This all supports our commitment to growing distributions to shareholders over the long term.' Shares gained 3.75% to 470p.
Mining giant Glencore (GLEN) also found favour with investors despite posting a full-year production update which showed a 6% drop in copper production and a similar decline in average selling prices on the London Metals Exchange (LME). Shares gained 4.7% to 232p.
Low-cost airline Ryanair (RYA) was in the news for a second day running, revealing a 5% increase in January passenger numbers to 10.8 million thanks to a near-70% increase in traffic on its Lauda subsidiary. After yeaterday's 6% gain, shares eased back 0.4% to €15.78.
Plumbing and heating distributor Ferguson (FERG) announced it would divert up to $500m in surplus cash to a new share buyback programme over the next 12 months. Ferguson has returned $4 billion of surplus cash to shareholders over the last eight years yet its balance sheet remains strong. Shares added 4% to £71.80.
Defence and security company Qinetiq (QQ.) climbed 3.2% to 368p after it issued a positive third quarter trading update and confirmed its expectation of 'high single digit revenue growth' for the full year together with an increase in operating profits.
Enterprise software seller Micro Focus (MCRO) was a major faller after reporting lower sales and operating profits for the year to 31 October albeit in line with its guidance back in August. It also announced that chairman Kevin Loosemore is stepping down later this month. Shares collapsed 14% to 852p.
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