Britain’s top share index rose on Wednesday, boosted by its heavily weighted mining sector after Federal Reserve Chair Janet Yellen urged caution in raising rates, lifting riskier assets.
Miners .FTNMX1770 were up 5.5 percent, rising off a 1 month low hit in the previous session.
The sector had fallen 15.8 percent since hitting 4-1/2 month highs earlier in March, pressured by a rising dollar.
However, it bounced following Yellen’s comments that the U.S. central bank should proceed only cautiously as it looks to raise interest rates. That hit the dollar, boosting the value of dollar-earning firms that report profits in sterling.
“Global economic growth is spluttering and the idea that we’ll see another rate hike from the Fed in the short term is being kicked into the long grass,” Tony Cross, market analyst at Trustnet Direct, said in a note.
“This is also driving the dollar lower so commodity stocks are finding widespread support with the natural resource plays scattered across the top of the board.”
The FTSE 100 index was up 77.93 points, or 1.3 percent, at 6,183.83 by 0756 GMT. The index remains 0.8 percent off its highest levels since the start of the year, last touched on March 18.
Outside the blue chips, Premier Foods (PFD.L) was up 7.5 percent after U.S. firm McCormick raised its offer for the firm.
The new bid proposal of 65 pence per share was above the previous, rejected offer of 60 pence per share. Shares in Premier Foods traded at 61 pence after the new bid was made.
“We see 65p as a good compromise price, allowing Premier’s management to highlight the extra value it has extracted from McCormick, whilst also offering shareholder’s the opportunity of a cash exit today at a reasonably full … valuation,” analysts at Shore Capital said in a note.
Among fallers, retail stocks came under pressure. Marks and Spencer (MKS.L) was the top FTSE 100 faller, falling to 400 pence, after Jefferies downgraded the stock to “hold” and cut its target price on the stock to 410 pence from 660 pence previously.
The broker cited the risk of growing unemployment and said it expected consumer confidence to fall, cutting its rating on other retailers such as Dunelm (DNLM.L) and Debenhams (DEB.L), which also fell.