UK stocks closed higher on Wednesday, bolstered by Anglo American on news the miner plans to give back up to $1 billion to investors and simplify its structure, while oil producers added further weight as they mirrored a rise in crude prices towards $63 a barrel.
BP rose 2.8 percent and Cairn Energy added 3.3 percent. Royal Dutch Shell, which reports third-quarter results on Thursday, and BG Group also featured among top gainers.
Insurer Prudential failed to join in with the broader market, falling 2 percent as a long-awaited strategic review by its chief executive failed to excite the market.
"We do not have a problem with the overall strategy, just the lack of bite in its presentation," said analysts at Sanford Bernstein. "However, today's meeting may well hang on the stock for a while." Traders also cited concerns about potential losses in Taiwan if interest rates remain at current levels for some time and a weak performance by online bank Egg.
Two-thirds of the market ended higher, taking the FTSE 100 up 45.7 points to close at 5,227.9 - its highest finish for a week. But stocks are still down sharply from a 4-year peak at the start of the month.
"It's not been a convincing bounce back. There's little doubt that markets had got rather extended at the end of the third quarter. There were some signs that risk at its height was somewhat extended and that investors had got to the point of becoming rather exuberant about the outlook for corporate earnings," said Paul Niven, head of strategy at F&C Asset Management.
"Input costs have been rising quite materially and output costs have been rising only modestly so that means that margins are likely to be under pressure in the corporate sector and that's against a backdrop in 2006 of slowing growth," he added.
Anglo American topped the blue chip leaderboard with a 6 percent jump after the world's third-largest miner promised to focus on its core mining operations and give money back to investors.
"They're confident about the business and they're giving cash back to investors which is always a popular move," said a dealer.
The positive sentiment in the sector filtered through to BHP Billiton, which closed 3.8 percent higher before its first-quarter output figures on Thursday.
Utilities featured on the downside, with a focus on Scottish Power as talk emerged late in the session of a possible delay to the $9.4 billion sale of its US unit PacifiCorp.
"The shares are down on speculation that regulators in the State of Oregon may delay the sale, in which case E.ON will not be keen to bid for Scottish Power," one trader said.
German utility E.ON has expressed interest in bidding for Scottish Power. The speculation stemmed from a story in an Oregon newspaper but Scottish Power said it was just an initial hearing in a process that was likely to take months.
Among smaller players, shares in storage and delivery firm Wincanton jumped 8 percent on renewed take-over speculation.
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