Strong results give Footsie a 1% lift

Shares in Weir Group bounced back strongly yesterday following a dip on Monday amid profit- taking in the wake of solid interim trading.

The Glasgow-based engineering group, which joined the FTSE 100 index in September, gained 45p, or almost 3 per cent, to 1,582p - one of the strongest risers in the top flight.

It was supported by an earnings upgrade from analysts at Charles Stanley, who are sticking with a "hold" rating on the shares. In a note yesterday, the broker said: "Shares in a conservatively managed business offering considerable overseas exposure and a strong after-market should trade at a premium rating to a very diverse peer group even without the possibility that estimates might be upgraded yet further in due course, especially so in the wake of upbeat comment from the mining sector."

Strong corporate earnings hoisted the wider market by more than 1 per cent, led by energy stocks after BP and BG Group results and ahead of the outcome of an eagerly awaited US Federal Reserve policy meeting.

At the two-day meet in Washington, which will end this evening, the Fed will consider the prospect of further quantitative easing. Markets are pricing in a commitment to buy at least $500 billion (312bn) in Treasury debt over the coming months to spur a flagging economy.

The Footsie closed almost 63 points higher at 5,757.43.

BP took another step in its recovery with better-than-expected third-quarter profits of $5.5bn, excluding the impact of the Gulf of Mexico oil spill. While there was no new guidance on BP's possible resumption of dividend payments, shares lifted 7.6p to 431.7p.

Shares in oil and gas exploration company BG Group were likewise on the rise, ahead 41.5p to 1,252p, after it upgraded its Brazilian oil and gas reserves estimate by about a third and reported a 6.7 per cent rise in third-quarter profits.

Insurer Aviva was another high-profile stock on the front foot after it announced plans for a further 400 million of cost savings and efficiencies and reported long-term savings figures in line with expectations. its shares responded with a rise of 4.7p to 402.3p.

There was a similar reaction to full-year results from Imperial Tobacco, which rose 38p to 2,035p after it lifted profits by 10 per cent with the help of price rises and strong sales gains in emerging markets.

Households products firm Reckitt Benckiser also featured on the risers' board after its figures met expectations and it set new targets for revenue and profits growth of 6 per cent and 16 per cent respectively. Shares were 32p higher at 3,557p, a rise of 1 per cent.

But there was further investor pain at outsourcing giant Serco, which fell 4 per cent after a similar slide on Monday after it apologised for a letter to suppliers demanding a rebate and pledged it would not pass on government spending cuts.Its shares were 21.5p lower last night at 565.5p.

Lloyds was down 2.2p to 67.3p, despite advising that it remains on track to make its first full-year profit since being bailed out by the tax-payer. Royal Bank of Scotland also eased back, down 0.2p to 45.4p.