FTSE rallies as Egypt fears fade

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The FTSE 100 Index rose 94.9 points to close on Tuesday at 5957.8

London’s FTSE 100 Index has rallied after positive developments in China and improved economic data overshadowed fears over Egypt at stock markets around the world.

The Footsie closed 1.6% higher, up 94.9 points at 5957.8, while America’s Dow Jones industrial average soared more than 100 points in early trade.

The mood in Europe was similarly positive, with Germany’s Dax up 1.5% and the Cac-40 in France 1.7% higher.

Upbeat manufacturing news in both the US and UK helped investors shrug off the impact of political turmoil in Egypt.

A fightback from market heavyweight BP also helped in London as the oil giant recovered early losses seen in the wake of full-year results. BP shares were 6.2p higher at 491p as the oil giant restored dividend payments but posted a smaller-than-expected fourth quarter profit.

The pound rose against the US dollar – up 0.6% to 1.61 dollars – after manufacturing survey data showed activity in January rising at the fastest rate in at least 19 years.

In America, there was also cheer as the Institute of Supply Management (ISM) said its January manufacturing index improved month-on-month.

Sentiment was lifted further after analysts said prospects for an imminent rise in interest rates by China’s central bank looked less likely, leaving demand in the emerging market unaffected.

This boosted the weighty mining sector on the London market, as Fresnillo surged 88p to 1384p and Kazakhmys lifted 72p to 1578p.

Technology firms were also doing well, led by Cambridge-based Autonomy after the software specialist’s fourth quarter results met City expectations. Shares jumped 6% or 94p to 1590p.

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