Strength in commodity stocks boosted leading shares on Tuesday, with miners in demand after U.S. aluminium firm Alcoa
Alcoa, the largest U.S. aluminium producer, kicked off the U.S. Q4 earnings season after Wall Street's close on Monday with revenue that beat expectations, though a plunge in aluminium prices helped push the firm into a loss.
Strength in copper prices also provided support for the miners after data that showed a rise in imports of the base metal by China, which accounts for 40 percent of the refined metal's global consumption.
At 11:40 a.m., the FTSE 100 <.FTSE> index was ahead 63.12 points, or 1.1 percent at 5,675.38, having closed 0.7 percent lower on Monday.
Gains by integrated oils also lifted the blue chip index as crude prices jumped 1.6 percent, with BP
Oil explorer Cairn Energy
In response, Oriel Securities upgraded its rating for Cairn Energy to add from hold.
Banks rallied after falls on Monday, with Barclays
Shares in Barclays are still building on the higher December support above 160 pence, with the general pattern since the summer being that of positive consolidation, said Andrew Gibson, Head of Research at Galvan.
The expectation in the near term is for an attempt to be made on the December intraday peak of 199 pence while the 50-day moving average now at 176 pence remains in place as support.
Investors in retailers found relief from the perceived gloom on the high street after cheerier Christmas trading updates from Marks & Spencer
Blue chip M&S, Britain's biggest clothing retailer, gained 3.1 percent after it said sales at UK stores open over a year rose 0.5 percent excluding VAT sales tax in the 13 weeks to December 31. That compared to a 0.7 percent fall in the second quarter.
Meanwhile, Debenhams, Britain's No.2 department store group, topped the FTSE 250 <.FTMC> leader board, up 9.9 percent, after it posted a slightly better than expected performance in underlying sales in the last 18 weeks as deep discounts lured customers in the run up to Christmas.
The gloom and doom factor regarding Marks & Spencer and Debenhams was palpable last week; commentators and analysts were in the main deeply pessimistic ahead of today's results. Yet in both cases results have exceeded expectations, and we are seeing relief rallies as a result, Paul Mumford, Senior Fund Manager at Cavendish Asset Management, said in a note.
A survey from the British Retail Consortium, released on Tuesday, showed British retailers finished 2011 with the best sales growth in months as hefty discounting lured in shoppers, although weak business a year earlier flattered the figures.
There were only a handful of blue chip fallers, with drugmakers the worst performing sector led by GlaxoSmithKline
(Editing by Jane Merriman)