TUESDAY MARKET CLOSE: Markets upbeat ahead of Fed verdict

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The FTSE 100 climbed back above 6,400 as traders reflected that company profits were holding up well despite ongoing economic issues.

With the US Federal Reserve expected to end its quantitative easing programme this week the Footsie added 38.71 points to 6,402.17 as analysts speculated that the Fed may also seek to give a fillip to markets with a reassuring statement.

Chris Beauchamp, market analyst at IG, said: “The pessimists might say this is the rally’s last hurrah before QE departs the scene but the earnings season, despite misses from the likes of IBM and Twitter, has once again been the foundation of equity market gains.”

In London the gains came despite a poor session for the banks. Trading statements from Lloyds and Standard Chartered left these stocks as the two heaviest fallers of the day.

Yet another impairment for mis-sold payment protection insurance from Lloyds frustrated investors and sent shares down more than 2 per cent, or 1.8p to 73.5p, despite soaring profits.

Asia-facing Standard Chartered was the biggest blue chip faller as it reported a 16 per cent slump in quarterly operating profits and said it remains “watchful” over trading in key countries such as India and China. Shares dropped almost 9 per cent – off 96.6p to 998.4p – and have now lost around a quarter of their value since the start of the year.

Royal Bank of Scotland was 0.1p cheaper at 359.1p ahead of its own trading update on Friday, though Barclays managed to climb 1.15p at 223p.

Oil giant BP helped boost the FTSE 100 as it increased its quarterly dividend despite a fall in profits for the three months to September. Shares were 6.75p higher at 437p, while rival firm Royal Dutch Shell added 3.5p at 2,282p.