FTSE posts only modest gains after Wall Street's come-back

LONDON: Britain's major share index posted modest gains but remained at 10-month lows on Wednesday after Wall Street recovered overnight from a brutal global sell-off.

The FTSE 100 was up 0.6 percent at 7,185 points by 0903 GMT while other European bourses were also trading in positive territory at a roughly similar pace.

"Certainly there is a risk that yesterday's rally is a fake out before another selloff", said Neil Wilson, senior market analysts at ETX Capital, noting that US futures were currently trading in the red.

British shares lost ground for the previous six sessions and are down 6.4 percent so far in 2018.

Financials, which were badly hit during the sell-off, added the most points to the index.

Old Mutual, HSBC, Barclays, Prudential, Lloyds rose 2.9 percent, 1 percent, 1.6 percent and 1.4 percent respectively.

Investment trust Scottish Mortgage added 3.7 percent, recovering some lost ground after the sell-off in US tech stocks took its toll on the fund, whose top holdings include Amazon and Tesla.

Oil majors BP and Royal Dutch Shell also contributed to lifting the index, rising 1.1 percent and 1.3 percent as oil prices rose on Wednesday boosted by a report that US crude inventories fell last week.

Africa-focused oil and gas producer Tullow Oil was up 2.7 percent after it reported a surprise annual operating profit after three years in the red.

Defensive sectors such as utilities, consumer staples or telecoms were also in favour among investors.

United Utilities rose 2.3 percent while Vodafone took 1.7 percent and Diageo added 1.1 percent.

In the retal sector, Tesco suffered limited damages, down 0.8 percent, after it was reported it faced Britain's largest equal pay claim with a possible compensation bill of up to 4 billion pounds.

"Investors may take some time to really assess this as it has come out of the blue, but it appears to be a serious claim and one that clearly poses downside risks to the stock", commented ETX Capital's Neil Wilson.

Rio Tinto was little moved, up just 0.1 percent, after it handed shareholders a record annual dividend as stronger commodity prices helped the miner to its highest annual profit in three years.

British housebuilder Redrow was up 3.2 percent after it reported a 20.4 percent rise in first-half revenue and increased its interim dividend by 50 percent.