The markets in London continued their march forward on Thursday, with the benchmark FTSE 100 index adding 35 points, or 0.6%, to close at 6,361. The mid-cap FTSE 250 index jumped up by 79 points, or 0.6%, to close at 13,704.
European markets also rose as investors gained confidence about continued monetary support from central banks. This comes after the US Federal Reserve chairman, Ben Bernanke, said on the second day of his congressional testimony that the Fed’s bond purchases are needed to boost a still weak economy.
International Consolidated Airlines Group Leads UK Markets Forward
Some key large-cap companies that trade in London reported earnings results on Thursday, which led them to either lag or lead their peers in terms of market performance.
Shares in International Consolidated Airlines Group (IAG) rallied by 8% after the company reported a small operating loss for 2012. The company owns both British Airways and Iberia.
Meanwhile, shares in the Royal Bank of Scotland (RBS) and Kazakhmys (KAZ) were the two main FTSE 100 casualties. Shares in RBS fell by 6.5%; shares in Kazakhmys fell by 8.5%.
RBS is Left Behind
"RBS’s terrible fourth quarter, which resulted in a £2.6 billion loss, was driven by a number of unusual items," said Morningstar's banking analyst Erin Davis. Those unusual items included a "£1,150 million of additional redress costs related to mis-selling scandals, £620 million of restructuring costs, and £518 million of goodwill write-downs," she said.
"On a management-provided underlying basis, the bank reported an operating profit for both Q4 and the full year, albeit a meagre one. However, the bank saw a 7% sequential fall in core operating profits in the fourth quarter and an accompanying 61% increase in the non-core operating loss as the UK economy stagnated."
Meanwhile, British American Tobacco (BATS) shares also edged 0.5% higher after reporting its 2012 annual results.
"Although British American Tobacco experienced a 2% decline in its overall cigarette volumes during 2012, its Global Drive Brands (led by Lucky Strike) grew volumes by 3%," explained Morningstar analyst Thomas Mullarkey. "These strong brands have tremendous pricing power and helped to drive up the group’s adjusted profit by 3% to GBP 5.7 billion. And combined with steady share repurchases, adjusted EPS increased 7% to 207.5p."
Morningstar's Rouhan Sharma contributed to this article.
To see the top winners and losers on the FTSE 100 each day, check out Morningstar's Heat Map.