A rise in mining shares and a strong start on Wall Street helped lift the FTSE 100 after four days of decline.
Commodity companies were supported by comments over the weekend from Chinese premier Xi Jinping, who unveiled new infrastructure plans, while dealers anticipated further interest rate cuts to boost demand.
Meanwhile a series of takeovers in the US saw the Dow Jones Industrial Average jump around 270 points by the time the London market closed.
So the FTSE 100 finished 36.41 points higher at 6891.43, despite continuing uncertainty over the financial outlook for Greece.
Among the miners, Antofagasta added 24.5p to 739.5p and Rio Tinto rose 7p to 2816.5p.
Kingfisher climbed 7p to 364.8p ahead of its figures on Tuesday, after its proposed €275m deal to buy France’s Mr Bricolage collapsed.
Chip maker Arm added 27p to £11.06 as Intel’s reported plan to buy rival chipmaker Altera Corporation pushed technology shares higher.
Catering group Compass added 12p to £11.86 following an upbeat trading update which forecast first half revenue growth of 5.5%.
But Babcock International fell 10.5p to 963p despite saying its full year performance was in line with expectations.
SABMiller fell 7.5p to 3605.5p despite continuing talk it could be a takeover target.
Morrisons dipped 2.1p to 196.4p. as Goldman Sachs cut its recommendation on the supermarket from buy to neutral.
Among the mid-caps, Abu Dhabi’s Al Noor Hospitals was the biggest faller in the FTSE 250. Its shares dropped 53p to £10.25 despite an 18% rise in 2014 underlying net profit and a 23% rise in revenues. The group, which operates three hospitals and 17 clinics in the United Arab Emirates, said underlying margins had slipped back due to wage inflation for staff and significant investment in its facilities and services. Analysts at Numis said:
Revenues [were] 1% above our and consensus expectations, but adjusted earnings per share 8% lower than consensus. Whilst EBITDA margin was only 40 basis points lower than conensus, higher depreciation and lower interest income contributed to the miss. Looking forward, the company points to positive underlying demand drivers in the region, but acknowledges continued difficult trading conditions in its Khalifa Street Hospital (competition, physician attrition and refurbishment), and “anticipates that 2015 is likely to see a further increase in costs as investment is made in the short term” before efficiencies flow towards end-2015 and into 2016. This is in line with our expectations, and we therefore remain comfortable with margin forecasts significantly below consensus. Shares have run up into these results, and we therefore reduce our recommendation to hold. Once we see consensus expectations moderate, we are likely to become more positive, since we see considerable longer-term upside from improving efficiency from doctors hired over the last two years.
