London shares opened higher on Thursday as BAe Systems and Lloyds Banking Group rose after results, though gains were restricted by a sharp fall in Shell after the oil giant revealed a plunge in net profit.

The benchmark FTSE 100 index added 28.21 points or 0.43 percent to 6,649.27 points at 8:54 am.

BAE shares climbed 2.15 percent to 455.60 pence as the weapons waker raised its full-year earnings forecast.

It now expects "double-digit growth in underlying earnings per share" in 2013 after previously saying it was on course for a more modest gain.

The change in outlook comes despite the company also announcing that profit after tax slipped by 1.9 percent to ??411 million in the six months to June 30 compared with the first half of 2012.

BAE and Saudi Arabia signed a ??4.5-billion deal in 2007 to supply 72 Eurofighter Typhoon jets to Riyadh, but the contract, known as the Salam programme, has faced obstacles over the cost.

Lloyds surged 6.48 percent to 72.91 pence as the state-rescued bank announced a ??1.858 billion jump in underlying first half profit to ??2.902 bn and improved its full year net interest margin to close to 2.10 percent.

On the bottom line, it swung to a net profit of ??1.578 billion from a ??662 million loss a year earlier.

Shell A shares sank 4.78 percent to 2,131 pence as the Ango-Dutch oil behemoth said net profits plunged by 57 percent in the second quarter compared with the equivalent period a year earlier.

Earnings after tax slumped to $1.737 billion in the three months to June 30 compared with $4.1 billion in the second quarter of 2012.

"These results were undermined by a number of factors -- but they were clearly disappointing for Shell", chief executive Peter Voser said in an earnings statement.

Voser said the group's bottom line was hit by higher costs, exploration charges, adverse currency exchange rates and unrest in major oil producer Nigeria.

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