London close: FTSE jumps 1.9% as markets rally after Easter break

London's FTSE 100 posted a triple-digit point gain on Tuesday as traders returned to their desks in a bullish mood after the long Easter weekend.

Buoyed by the recent jump in crude prices, improving economic data and speculation that the Federal Reserve will not rush to hike interest rates, the Footsie finished 128.31 points higher (+1.88%) at 6,961.77.

"European equities, revived after a long weekend, start the short week with an aggressive 'risk-on' mindset," said IG analyst Alastair McCaig.

After a strong performance on Monday, US markets were continuing to rise in the aftermath of Friday's disappointing jobs report, which prompted analysts to push back their forecasts for the first move to tighten policy. Figures out last week showed that US non-farm payrolls totalled just 126,000 in March, slightly over half the 245,000 expected by analysts.

Also helping sentiment was a report from the Confederation of British Industry which said that UK economic growth remained steady in the first quarter and is expected to gather momentum over the next three months.

Meanwhile, data released mid-morning showed that activity growth in Britain's services sector accelerated last month. Markit's services purchasing managers' index for March rose to 58.9 from 56.7, ahead of the 57 consensus forecast.

BG Group leads the charge

Resource stocks were the best performers in London on Tuesday afternoon as risk appetite returned after the long weekend, with BG Group leading the surge after a farm-in agreement with Petro Matad in central Mongolia.

Brent crude prices was up 0.6% at $58.46 a barrel, extending gains after jumping nearly 6% on Monday on speculation Iran may increase exports after a preliminary nuclear deal. Reports that growth in US crude stockpiles may be slowing also supported prices.

Shell, BP and Premier Oil were all putting in decent gains.

Shares in pharma firm Shire rose after announcing that it has reached an agreement with the US Food and Drug Administration on a clear regulatory path for a potential attention-deficit/hyperactivity disorder (ADHD) treatment for adults.

Mining stocks were also performing well, including Rio Tinto after completing a bigger-than-expected off-market share buyback due to strong demand. Copper miner Antofagasta was also higher after Jefferies kept a 'buy' rating, saying: "We expect Anto's strengths to lead to share price outperformance during the current period of macro weakness."

British Airways owner IAG was among the handful of fallers after JPMorgan Cazenove downgraded its recommendation from 'overweight' to 'neutral', saying it favours low-cost carriers strongly over legacy airlines.

Shares in telecoms giant Vodafone were on the rise after UBS highlighted the possibility of a bid from US cable operator Liberty Global.

UK food and clothing retailer Marks & Spencer had its rating promoted to 'buy' from 'hold' over at Societe Generale.

Market Movers
techMARK 3,200.19 +1.18%
FTSE 100 6,961.77 +1.88%
FTSE 250 17,521.48 +1.46%

FTSE 100 - Risers
BG Group (BG.) 910.40p +6.74%
Shire Plc (SHP) 5,385.00p +4.36%
Rio Tinto (RIO) 2,862.00p +4.03%
Coca-Cola HBC AG (CDI) (CCH) 1,329.00p +3.91%
Royal Dutch Shell 'B' (RDSB) 2,208.50p +3.86%
Taylor Wimpey (TW.) 159.00p +3.79%
Glencore (GLEN) 290.65p +3.53%
Sainsbury (J) (SBRY) 269.40p +3.46%
Royal Dutch Shell 'A' (RDSA) 2,094.00p +3.43%
Associated British Foods (ABF) 2,964.00p +3.42%

FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 591.50p -1.17%
Direct Line Insurance Group (DLG) 318.80p -0.25%
Burberry Group (BRBY) 1,714.00p -0.06%

FTSE 250 - Risers
Premier Oil (PMO) 150.80p +12.96%
Hunting (HTG) 540.00p +8.89%
Soco International (SIA) 172.60p +8.08%
Ophir Energy (OPHR) 145.60p +6.90%
Cairn Energy (CNE) 170.00p +6.65%
Vedanta Resources (VED) 509.00p +6.22%
Petrofac Ltd. (PFC) 1,016.00p +5.56%
Tullow Oil (TLW) 300.30p +5.48%
Acacia Mining (ACA) 281.40p +5.35%
Regus (RGU) 235.90p +4.84%

FTSE 250 - Fallers
Allied Minds (ALM) 680.50p -1.09%
Kennedy Wilson Europe Real Estate (KWE) 1,098.00p -1.08%
TalkTalk Telecom Group (TALK) 350.00p -1.05%
Imagination Technologies Group (IMG) 204.10p -0.83%
Computacenter (CCC) 677.00p -0.81%
Just Retirement Group (JRG) 165.90p -0.66%
Cranswick (CWK) 1,415.00p -0.63%
Playtech (PTEC) 790.50p -0.57%
Michael Page International (MPI) 531.00p -0.56%
Brewin Dolphin Holdings (BRW) 318.40p -0.47%