London stocks eke out gains for fourth straight day on UK policy reversal optimism

Ithaca Energy explores IPO

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Shell enters bid to buy Nature Energy

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FTSE 100 up 0.24%, FTSE 250 adds 0.15%

Oct 18 (Reuters) - Britain's main equity indexes managed to eke out gains for the fourth-straight day on Tuesday, boosted by the reversal of the government's unfunded tax cut plans and optimism over the earnings season that boosted U.S. stocks.

The blue-chip FTSE 100 closed 0.24% up and the domestically focussed FTSE 250 ended 0.15% higher.

Britain's new finance minister, Jeremy Hunt, on Monday scrapped Prime Minister Liz Truss's economic plan and scaled back her vast energy support scheme to try to stem a loss of investor confidence.

"The UK government has essentially shifted policy initiatives back to the Bank of England and removed the perception that the two were at odds with each other," said Sean Darby, global equities strategist at Jefferies.

"At the end of the day, the UK government blinked, while the BoE has seen its credibility restored," said Darby.

He added that there is room for a sizeable change in sentiment towards domestically exposed FTSE 250 which had been battered recently.

However, indexes pared most of the morning gains as the Bank of England said it had not decided to delay again the start of its sales of government bonds after the Financial Times reported that another postponement was likely because of the turmoil in British markets.

Meanwhile, Wall Street climbed as strong earnings from Goldman Sachs ignited hopes that upbeat corporate reports could help soothe market worries of a potential recession due to rising inflation and interest rates.

North Sea oil and gas producer Ithaca Energy said that it is planning a London listing, stoking hopes for a fourth quarter recovery in a stock market overshadowed by Britain's dismal economic outlook.

Among single stocks, Moneysupermarket.com jumped 5.3% after the insurance-price comparison website said it expected annual core profit to be at the upper end of market views.

Shell is among a number of companies joining a second bidding round to acquire Danish biogas producer Nature Energy, for around $2 billion sources familiar with the matter said, as energy firms race to boost low-carbon businesses. Its shares were down 0.6%.

Bellway Plc slipped 2.2% as the homebuilder warned of moderating demand, pressured by rising mortgage rates. (Reporting by Sruthi Shankar and Johann M Cherian in Bengaluru; Editing by Subhranshu Sahu and Anil D'Silva)