Metals, Oils Lift Britain's FTSE Index

Britain's leading share index pushed higher on Wednesday morning, helped by strength in heavyweight commodity issues after base metal and crude oil prices rose on positive U.S. ISM data.

The FTSE 100 index was up 113.43 points, or 2.2 percent at 5,270.27 at 0808 GMT, adding to Tuesday's 1.1 percent rally. It had shed nearly 6 percent in the previous two sessions.

"The two strands remain of growth and debt. On the growth side there are some signs of progress being made, but on the debt side there remains a fragility in sentiment particularly for the euro zone ," said Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers.

"The market has been taking a top down macro view at the moment, but on a selective bottom up approach there are some attractive stocks out there at the moment," Hunter said.

Integrated oils headed the blue chip gainers, supported by a 1 percent rise in the crude price CLc1 on demand hopes after Tuesday's U.S. non-manufacturing ISM report showed an unexpected acceleration.

BG Group added 3.5 percent. Its Indian unit is in talks with state-run Oil and Natural Gas Corp to acquire a stake in a gas block off the country's east coast.

BP added 3.2 percent helped by news its partner Chevron has made a deepwater discovery in the Gulf of Mexico at the Moccasin prospect in which BP has a 43.75 percent stake.

Oil services firm John Wood Group rose 4 percent, with traders saying the rally will not stop the stock being ousted from the FTSE 100 index at the latest quarterly review, due to take place after the close on Wednesday.

The review is based on closing prices from Tuesday's session, with Wood Group and private equity firm 3i Group both set for FTSE 100 demotion. Fund manager Ashmore Group and packaging firm Bunzl were set to take their places in the index.

Miners also lent their strength to the FTSE 100, lifted by stronger base metal prices.

Anglo American gained 2.4 percent. The global miner is interested in U.S. company Walter Energy , and said to be weighing an offer of $120 per share, the Times newspaper reported. BHP Billiton , up 1.6 percent was also said to be interested in Walter.

Precious metals miner Randgold Resources lost 1.3 percent, retreating with a 2 percent tumble by the spot gold price in Asian trade after heavy losses on U.S. gold futures on technical selling.

Imperial Tobacco shed 0.6 percent, having been a strong gainer on Tuesday, with Goldman Sachs downgrading its rating to "neutral" in a review of European consumer goods.

Ex-dividend factors accounted for the other two blue-chip fallers, with Diageo and Hargreaves Lansdown among a dozen FTSE 100 stocks trading without their payout attractions on Wednesday.

Citigroup's quantitative strategy rermained cautious.

"With many looking for a bottom in the market, we continue to monitor the price of risk. We reaffirm our stance that although our Low Risk portfolio is trading at a 30 percent premium to the market, we do not envisage a shift away from low risk in the absence of significant positive macro news," Citigroup strategists said in a note.

British house prices fell 1.2 percent in August, mortgage lender Halifax said. While prices were 2.6 percent lower in the three months to August compared to a year-ago, Halifax noted an improvement in the trend.

British industrial and manufacturing output figures will be released at 0830 GMT.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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