Commodities and China hopes lift FTSE in early trade
The FTSE 100 rose by 0.5 percent early on Wednesday, after heavy losses in the previous session, as commodities tracked higher crude and metal prices, and investors banked on sustained Chinese economic growth.
FTSE gains as metals spur minersAt 8:37 a.m., the benchmark index was up 23.8 points, or 0.5 percent, at 5,344.2 after falling 2.4 percent on Tuesday.
Asian markets recovered from a two-year low as Chinese shares surged on hopes Beijing would introduce a stimulus package to jump-start growth.
Positive Asian sentiment and rising precious metal prices helped buoy miners, while oils were boosted by U.S. crude climbing to almost $115 a barrel.
BP, Tullow Oil, BG Group and Royal Dutch Shell climbed 1.4-6.3 percent. UBS raised Tullow Oil's valuation rating to "buy" from "neutral".
Miners Rio Tinto, BHP Billiton, Xstrata, Kazakhmys and Anglo American rose 1.1-4 percent.
"It seems to be the same sort of suspects," Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. "Bit of strength from the mining stocks...in the oils as well. There is also something on the Asian front."
"There were concerns that after the Olympic games some of the Chinese economy might start to drop off the cliff slightly but it looks very much like that isn't going to be the case."
"Underneath all that, trading volumes are very thin. The market is reasonably directionless, so you do get those slight swings in volatility."
Minutes from the Bank of England's August meeting at 9:30 a.m. will be eagerly watched for clues on future interest rates.
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