The FTSE 100 rose yesterday but shed most early gains after central banks held firm on their monetary policy, confounding some investors’ hopes of further easing.

Cyclical stocks, which rise and fall with investor confidence about the economy, gained after heavily indebted Spain hit the top end of its fund-raising target in a bond sale yesterday.

However, the UK’s blue chip share index came off an intraday high of 6,459.68 after the Bank of England decided against more stimulus for Britain’s ailing economy.

“Traders were expecting a little bit more from the Bank of England, maybe increasing the size of the asset purchase programme. We didn’t get anything on that front, and stocks have traded sideways since then,” Manoj Ladwa, head of trading at TJ Markets, said.

The European Central Bank also left policy unchanged. However, ECB President Mario Draghi contributed to a volatile afternoon of trade in European shares when he was non-committal as to whether he felt equity markets were fairly priced at current lofty levels.

“While they aren’t increasing stimulus, central banks are still maintaining their liquidity programmes, and it is a liquidity-driven market.

“Earnings are also coming in better than expected,” Ladwa added, saying he expected equity markets to push higher in the coming days.

The FTSE 100 closed up 11.52 points, or 0.2 per cent, at 6,439.16, having faltered at the 6,460 level – a five year high – for the second day running.

Impressive earnings reports yesterday came from Aggreko, among others. Shares of the world’s biggest temporary power provider jumped 14.5 per cent after the company raised its dividend by 15 per cent following an 11 per cent rise in 2012 pretax profit.

Engineer IMI shares also rose, by five per cent, after the company announced results and a plan to buy back up to £175 million of its shares over the next 12 months.

With nearly two-thirds of the FTSE 100 having reported annual results, 68 per cent of them have beaten or met expectations, according to Thomson Reuters StarMine data. Earnings newsflow was not all in one direction, however.

Life insurer Aviva tumbled 12 per cent after it cut its dividend by more than a quarter to provide extra funds for a turnaround strategy aimed at bolstering capital and profit.

The cyclical sectors of basic materials, which includes heavyweight miners, financials and energy, combined to add more than 18 points to the FTSE 100 index.

While the Dow Jones index continues to set fresh all-time highs on Wall Street, London’s FTSE 100 remains around 4.5 per cent off records struck in 2007, and was rangebound between 6,200 and 6,400 for much of February.

“The FTSE 100 consolidated for much of February in a sideways range with support from swing-point lows around 6,250 and has now reasserted from the four-month uptrend line,” Dominic Hawker, technical analyst at Messels, said.

“The majority of constituent stocks are participating in this rally. It still looks bullish to me.”