London stocks higher in quiet trade

Britain's stock market drifted higher on Tuesday as investors digested a barrage of company results in subdued trade as most European markets were closed for the May Day public holiday. London's FTSE 100 index of top companies gained 0.22 percent to 5,750.33 points in midday deals. In foreign exchange trade, the European single currency rose to $1.3261 from $1.3240 in New York late Monday. Sterling meanwhile retreated to $1.6202, while gaining some ground against the euro. "May starts on a quiet (note) as almost all markets in Europe are closed due to the May Day so volume should be very light," said trader Anita Paluch at Gekko Global Markets. With much of Europe closed for business, London investors absorbed results from British energy giant BP, state-rescued bank Lloyds, cigarette maker Imperial Tobacco and hedge fund manager Man Group. "There's a lot of corporate news for investors to digest ... and the FTSE has (edged) into positive territory," said analyst Andrew Crook of Sucden Financial Private Clients. Shares in Lloyds Banking Group (LBG) rallied 4.64 percent to 32.45 pence, topping the FTSE leaderboard, after the lender announced a return to net profit in the first quarter. The bank, which is 40-percent owned by the government, said that cost cutting and lower bad debts had offset rising compensation claims. Profit after tax stood at £10 million ($16 million, 12 million euros) in the first three months of 2012 as LBG set aside another £375 million to compensate clients who were mis-sold insurance. The slender profit contrasted with a huge net loss of £2.43 billion in the first quarter of 2011, when it was hit by far bigger compensation claims. Imperial Tobacco shares meanwhile jumped 2.68 percent to 2,530 pence as investors welcomed the group's upbeat outlook and shrugged off news of an 11-percent decline in net profit to £826 million in the six months to March. On the downside, BP fell 3.07 percent to 431.37 pence after it reported net profits sank 18 percent in the first quarter, as output was hit by the sale of assets to meet its huge Gulf of Mexico disaster costs. Profit after tax fell to $5.92 billion (4.46 billion euros) from $7.25 billion in the 2011 first quarter. Man Group tumbled 5.99 percent to 97.29 pence after the hedge fund manger said funds under management slumped almost 15 percent to $59 million by the end of the first quarter. The company added that improved investor sentiment, seen at the start of the year, had begun to reverse in March. Europe's main equity markets began the week on the back foot on Monday after official data confirmed that Spain was back in recession, while Standard & Poor's slapped a downgrade on leading Spanish banks. Spain's economy shrank by 0.3 percent in the first quarter, the same rate as in the last three months of 2011. A recession is defined as two successive quarters of shrinking economic output.