LONDON: Britain's leading stock index rose on Tuesday, lifted by gains for shares in budget airline easyJet and support services group Capita. Capita rose 5.3 percent, making it the top FTSE 100 gainer, after the company expressed increasing confidence over its 2016 prospects.
The stock had hit its lowest levels in two years earlier in the week.
"After such a good start some are understandably asking whether the company is staying cautious at this early stage," said Mike van Dulken, head of research at Accendo Markets.
"Potential for expectations to be beaten and guidance raised as the year progresses may have presented an opportunity to buy in around the lows."
Shares in easyJet gained 2.7 percent.
Even though the airline reported a half-year loss, traders and analysts were reassured by its assertion that it was on track to meet market expectations for full-year results, and were encouraged by its plans to boost its dividend payout ratio.
"The dividend payout ratio has been lifted from 40 percent of post-tax income to 50 percent, reflecting strong cash flows," Cantor Fitzgerald analysts wrote. The blue-chip FTSE 100 index was up 0.7 percent at 6,156.65 points by the close.
The FTSE 100 has lost 1.4 percent this year and is 13.6 percent below a record high reached in April 2015, with concerns about a China-led global economic slowdown having hit world stock markets.
Traders expressed caution over the FTSE's prospects before a June 23 referendum on Britain's membership of the European Union, although many still expect "Yes" voters to prevail.
"I foresee the FTSE making a small recovery to 6,500 when the Brexit vote is finally put to bed and we stay with the EU," InterTrader chief market strategist Steve Ruffley said.
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