The index climbed as high as 0.35%, taking it above the 7,500 mark by mid-morning and the highest it has been in one week.
Specialist chemicals company Croda International and oil giant BP were the top risers during Tuesday morning trading, with shares up 3.6% to £41.6p and 2.9% to £5.2p, respectively.
BP’s share price has endured many bumps in the road over the last year, as the price of Brent crude has ebbed and flowed from $57 per barrel (p/b) in early January down to $45 p/b in June.
But with the price of Brent crude surging above $60 p/b on Monday and news that BP had posted healthy Q3 profits, its shares took off, reaching highs not seen since 2014 when oil was trading at $100 p/b.
Quarter on quarter, profit was $1.8bn during the third quarter versus $144m in the second quarter. So far this year, the group has taken in profits of $3.4bn compared with a loss of $382m the year prior.
The company has been able to sustain a healthy pipeline of production, generating around 3.6 million barrels a day, 14% higher than its production level for the same period in 2016.
On the back of these figures, the oil giant confirmed it would be bringing back its share buyback programme in the fourth quarter.
While The Share Centre’s investment research analyst Helal Miah cited the firm’s 20% stake in the underperforming Rosneft and its high net debt, which has now crept up to $40bn, he acknowledged “these are great results”.
“With oil prices recently averaging closer to $50 a barrel, the recovery in the share price is a reflection of how well these companies have stripped costs and can still generate good cashflows,” he said.
“Indeed, management described current finances as ‘back into organic balance at an oil price below $50 a barrel’ so investors should take confidence in the fact that current oil prices are about $10 a barrel higher.
“We maintained our ‘buy’ recommendation throughout the oil price plunge as we believed in the longer term prospects and recovery potential at BP.”
Ryanair
Discount airliner Ryanair, another firm that has found itself in hot water over recent months, also delivered a solid set of half year results, reporting an 11% jump in profits to €1.3bn.
But profit in the last quarter was 2% lower at €895m thanks to a row between Europe’s largest airliner and its pilots, which forced the airline to cancel 18,000 flights between this November and next March.
Despite the ongoing turbulence with its pilots, customer traffic grew 11% to 72 million as passengers were tempted by 5% lower fares.
Chief executive Michael O’Leary reiterated that the pilot rostering mishap was a “material failure in the management” and stressed the airliner is “not short of crews”, having hired 900 pilots this year to join its existing crop of 4,200.
While, Laith Khalaf, senior analyst at Hargreaves Lansdown, admitted “it is too early to tell whether there will be any lasting effect from the flight cancellations announced in September”, he said “it seems unlikely reputational damage will be an issue”.
Further costs from “September’s rostering fiasco”, could emerge in the firm’s next update, he added, but for now “Ryanair isn’t blinking and has maintained its profit forecast for the year.”
“As the success of the Ryanair business model has shown, customers simply want to fly from A to B as cheaply as possible, and what happens in the few hours in between is less of an issue.”
The airliner’s shares were up close to 5% on the Irish Stock Exchange to €16.56.
WPP
Meanwhile, a turnaround eluded troubled advertising giant WPP, which continued to see negative like-for-like (LFL) sales and cut its guidance once again for the full year.
LFL net sales in the third quarter were 1.1% lower than the previous quarter with North America proving the weakest market, with LFL sales down 4.9%.
Total revenue on a LFL basis was also 2% weaker over the quarter, coming in at £3.6bn.
On a reported basis, the firm posted 8.9% higher revenue of £11.1bn over the first nine months of the year.
In light of the figures from its latest update, WPP announced it had revised its forecast and expected broadly flat LFL revenue and net sales growth of the full year.
Despite this, the company’s shares were up 1.2% at £13.1p at the time of writing, still some 18% lower than their value pre-profit warning in August.
