Britain's FTSE-100 index turned up late in the day to close higher on Wednesday following strong US economic data, although many investors expect Britain will raise interest rates on Thursday to cool UK growth.
News and information group Reuters was top FTSE gainer, up 3.1 percent after Dutch bank ABN Amro reported strong profit growth and pointed to a pick-up in Europe, the company's biggest market. Reuters' fortunes are tied to the financial services industry, the source of most of its core revenues.
The blue chip index finished 7.9 points higher at 4,398.5, swinging back up from a session low of 4,369.1 points after US factory orders and supply managers data both came in ahead of expectations. Volume was a brisk three billion shares.
Michael O'Sullivan, a strategist at investment research house State Street Global Markets, said the data helped the UK market come back above its lows, pointing out that a rate hike from the Bank of England on Thursday was widely anticipated.
"The Bank of England rate hike has been extremely well flagged. The FTSE is actually up because it's more defensive than some of the other European indices," he said.
David Brown, an economist at Bear Stearns, said the US data were positive but that investors would want confirmation from the jobs market and Friday's US jobs data that the economic recovery is well underway.
"There's going to be no breakout for this market until we see the colour of the payroll data on Friday. They'd better be good numbers," said Brown.
Mobile phone company mmO2 was a bright spot, rising 2.1 percent after it beat forecasts with its announcement of 855,000 new subscribers in the Christmas quarter. Miners BHP Billiton, Rio Tinto and Anglo American gained ground after copper prices hit 6-1/2 year highs, while oil major BP rose 0.8 percent.
Shares in ITV, the broadcaster created from the merger of Granada and Carlton, fell 5.3 percent to 139-1/2p, back below the level at which they made their debut on Monday.
"It's a little excessive but they went from 142p to 150p in pretty much a straight line, so it doesn't seem as overdone as it would appear on the screen," said a trader.
Shares in Britain's largest pay-TV company, BSkyB, fell 1.9 percent after news that Chief Financial Officer Martin Stewart was leaving to pursue other interests.
According to sources close to the situation, Stewart was a candidate to replace Tony Ball as chief executive of BSkyB, a job which went to James Murdoch, son of Rupert Murdoch whose News Corp owns about 34 percent of BSkyB shares.
Technology shares remained under pressure after disappointing profits and a gloomy global economic outlook from US technology leader Cisco Systems. Midcap telecoms testing firm Spirent and chip designer ARM Holdings both lost more than three percent.
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