The prospect of Chinese market pump-priming following downbeat economic data boosted London shares on Tuesday.
The FTSE 100 Index rose 86.26 points to 5866.18 as markets hoped for stimulus after Chinese GDP grew at what analysts described as a disappointing pace of 1.6% quarter-on-quarter in the fourth quarter.
Analysts noted that, while China’s growth figure was the lowest rate for 25 years, it was "reassuringly" in line with market expectations.
Jasper Lawler at CMC Markets said: "Equities are rebounding on Tuesday; setting up a possible fourth positive day for the FTSE 100 this year after Chinese economic data raised the prospect of further government stimulus."
In the UK, consumer price inflation registered a small rise, which the Office for National Statistics attributed mainly to air fares and motor fuels, partially offset by falls in alcohol and food prices.
Oil prices were on the up, with the price of a barrel of Brent crude climbing 2.8% to US$29.38. BP (LON:BP.) rose 4p to 344.5p and Royal Dutch Shell (LON:RDSB) gained 20p to 1357.5p.
Augustin Eden at Accendo Markets said: "Oil prices are rising this morning with both WTI and Brent heading back to their $30 resistance levels. With no change in the news on the supply front, hold on for inventory reports this week."
Ocado (LON:OCDO) jumped 42.3p, or 17.4%, to 284.8p on rumours that US online giant Amazon was weighing up a potential approach to the UK grocery delivery service. Both companies declined to comment on the speculation.
Elsewhere, Lifeline Scientific (LON:LSIC), the transplantation technology company that recently lifted profits guidance, said operating profit in 2015 should be at least double 2014's level. Shares in the group advanced 14.75p, or 7.9%, to 200.75p.
But Quantum Pharma (LON:QP.) reversed 12.5p, or 17.1%, to 60.5p as it said its niche pharmaceuticals division had faced delays in its product pipeline, which means operating profits are expected to be around £12.7mln for the year ended January 31 – around £700,000 shy of forecasts.
MARKET PREVIEW
London's blue chips are set to claw back yesterday's losses, encouraged by hopes of the Chinese authorities providing more help to markets.
Spread-betting quotes point to the FTSE 100 opening at around 5,870, up 90 points on last night's close.
The old “bad news is good news” mind-set returned overnight in China, with slowing growth in gross domestic product (GDP) raising hopes that the authorities will provide more stimulus.
GDP grew at its slowest rate in a quarter of a century in 2015, rising 6.9%, versus 7.3% in 2014.
Fourth quarter GDP grew at an annualised rate of 6.8%, which was one-tenth of a percentage point lower than the consensus forecast.
Shares in Hong Kong put in a good shift, with the Hang Seng 1.6% higher in the last hour of trading, while in Shanghai, the Composite index was 3.1% firmer.
Elsewhere in Asia, Japan's Nikkei 225 was 0.6% top the good.
The US equity market was closed yesterday.
Back in Blighty, full-year results from consumer goods leviathan Unilever (LON:ULVR) are scheduled, as is a trading statement from oil & gas firm Cairn Energy (LON:CNE).
“Recent press commentary indicates a planned refinancing for First Oil (private company), a partner with Cairn and Enquest in Kraken, has fallen apart and a sales process for First Oil is now under way,” notes Thomas Martin at Numis Securities.
“We understand that there has been no adverse impact upon development progress at Kraken to date as a consequence of the developments at First Oil,” he added.
“We look for an update on progress and evidence that the changes made by the FPSO [floating platform] contractor to address the scheduling issues at the yard are bearing fruit. Cairn has no producing assets today and is thus not exposed to current oil price weakness,” Martin noted.
Unilever has guided towards profit before tax of €7.37bn - €7.72, with the consensus a little below the halfway point at €7.50bn.
“Underlying fourth quarter sales growth in the region of 4% to 5% may be reported, with Emerging Market growth again outpacing Developed markets,” suggests Keith Bowman at Hargreaves Lansdown.
“The group’s focus on product innovation and cost control could be further underlined, with management’s summary of its markets as 'challenging' potentially repeated,” he added.