FTSE up on positive company results

British shares extend their gains from the previous session on Tuesday.

London - British shares rallied on Tuesday, extending their gains from the previous session with well received company news and a rebound in the Chinese stock market improving sentiment.

Chinese regulators stepped in with measures to stabilise the stock market following a move to remove personal income tax dividends for shareholders who hold stocks for more than a year. The Shanghai Composite Index rose 2.9 percent after falling earlier in the session.

“(There is some) hope that you've got a lot more stimulus on the way from China,” Chris Beauchamp, market analyst at IG, said.

The FTSE 100 was up 1.3 percent at 6,155 points at 08h50 GMT, broadly in line with European indexes. The mid-cap FTSE 250 index rose 1.1 percent.

Investment management service provider Ashmore Group surged 5.7 percent after reporting a rise in annual profit and revenue, even as its assets under management fell.

United Utilities was the index's top gainer, rising 3 percent, after another broker upgrade, with the utilities company on track for its sharpest two-day gain in nearly 4 months.

RSA Insurance Group, which recently received a friendly takeover proposal from Zurich Insurance, rose 1 percent after a deal to sell its Latin American operations to the insurance arm of Colombia's GrupoSura, the latest move by CEO Stephen Hester to sell off non-core assets and shore up the firm's balance sheet.

Whitbread was the index's top loser, falling 3.5 percent after posting slowing Q2 sales growth. The company, which owns Premier Inn hotels and Costa Coffee, said it expected to cut spending and increase some prices to counter the “substantial” cost of the higher national living wage.

In the FTSE mid-caps, insurer Amlin's stock jumped by 33 percent, the top gainer, after Japan's MS&AD agreed to buy the UK rival in its fourth major international deal in as many months by Japanese insurers expanding overseas.

British housebuilder Redrow rose about 2 percent after posting a 53 percent rise in full-year pretax profit, spurred on by the government's “help to buy” scheme designed to help younger and first-time buyers purchase a property.

On the macroeconomic front, British retail spending stagnated last month as mixed weather and the later-than-usual date of a public holiday dampened sales of furniture and school clothing and equipment.

REUTERS