The FTSE 100 Index finished ahead for the first time this week as sentiment was given a tentative boost by more upbeat corporate and economic news today.
A surprise decision by the Bank of England not to expand its quantitative easing programme was taken as a sign that an ailing UK economy was in no need of further immediate aid.
Keeping its head above water, the Footsie ended the day up 18.4 points at 4158.7, although earlier gains were pared slightly amid skittish trading on Wall Street.
The Dow Jones Industrial Average had started the day on a high as Alcoa kicked off the earnings season in the US with lower-than-expected losses.
But the US market ran out of steam and was flat in early trading despite encouraging unemployment numbers.
Meanwhile, oil slipped below $60 a barrel today as it continued its run lower on nervousness over the general health of the economy and future demand.
In London the Bank decision sent the pound more than 1% higher against the dollar.
Miners led the Footsie risers, while broker upgrades for a number of major retailers helped the sector post gains, including a more than 2% rise for Marks & Spencer.
M&S – up 7.5p to 313.75p – was joined among the leaders by Home Retail Group, owner of Argos and Homebase, after upgrades from broker Citi. Home gained 6.5p to 266.5p, while Next was also ahead, up 38p at 1569p.
However, Primark parent Associated British Foods lost 2p to 763p despite a positive report from the fast fashion clothing chain.
The group, which also owns the brands Twinings, Kingsmill and Silver Spoon, said Primark’s improvement in the 40 weeks to June 20 reflected store expansion and “excellent” growth in like-for-like sales.
Much of the recent movement in the London market has been driven by commodity stocks.
Miners surged up the risers board today with Fresnillo leading the way, up more than 10% or 44.5p at 487p. Citi brokers upped their rating on the stock to buy following a review of the precious metals sector.
Other firms in the sector making progress included Anglo American and Xstrata, which added 87.5p to 1651p and 22.7p to 609.8p respectively.
Meanwhile, more broker activity helped insurer Legal & General gain 1.5p to 51.29p or 3% after Morgan Stanley lifted its recommendation to overweight. Admiral – rated a buy by Bank of America – joined it on the risers board with a gain of 22.5p to 887.5p.
In the FTSE 250, housebuilders Barratt Developments and Redrow reported higher sales and stable prices, but it did little for their shares.
Both sounded a note of caution over the ongoing drought in the mortgage market, which threatens to hold back a sustained recovery. Barratt fell 3.5p to 151p while Redrow lost 11.5p at 201p.
The biggest Footsie risers were Fresnillo up 44.5p at 487p, Anglo American up 87.5p at 1651, Xstrata up 22.7p at 609.8p and Rio Tinto up 71.5p at 1967p.
The biggest Footsie fallers were Aviva down 12p at 291p, Autonomy Corporation down 41p at 1322p, ICAP off 9.5p at 421.5p and Hammerson down 6p to 279p.