Britain's index of 100 leading shares rose on Wednesday as upbeat miners and a retreat in US bond yields from 5-year highs soothed sentiment in stock markets. The FTSE 100 closed 0.6 percent higher at 6,559.6, underpinned by upbeat miners.
Antofagasta topped performers, rising 4.9 percent, after the Chilean copper miner said it expected 2007 to be another strong year for the firm and copper prices should remain historically high well into 2008.
Xstrata, up 4.8 percent, also benefited from an upgrade to its price target from Citigroup. The upbeat news buoyed the rest of the sector with Lonmin rising 4.7 percent, Vendanta gaining 3.5 percent and Rio Tinto surging 4.5 percent.
At a time when markets are nervy about prospects for global interest rates, news that US retail sales rose at the strongest pace since January 2006 initially hurt stocks by fanning worries that the US could tighten monetary policy further.
This took 10-year government bond yields above the Fed rate of 5.25 percent and to their highest level since 2002 but they then retreated, helping stock markets to recover. "I am amazed at how strong equity markets are given what's going in bond markets," said Roger Cursley, UK strategist at Investec.
"Retail sales (were) stronger than expected, business inventories were probably a little bit better than expected as well, which goes to support a stronger US economy argument." Banks also came into focus as on the whole they struggled to keep up with the market.
A source close to the situation said Barclays has not ruled out adding cash to the terms for its ABN Amro offer should it need to boost its bid to fight off a rival offer from a consortium of banks led by Royal Bank of Scotland. Barclays was flat and RBS dipped 0.1 percent.
Britain's biggest mortgage lender HBOS fell 1.2 percent, still suffering one day after it warned its shares of new mortgages had slumped. British insurer Royal & Sun Alliance also rose 3.7 percent, on talk of take-over interest. Elsewhere, Alliance & Leicester said Finance Director David Bennet will take over as chief executive next month, as it forecast full-year profit near the top of analysts' estimates. Its stock was up 1.3 percent.
The biggest loser was Johnson Matthey, down 2.2 percent after hitting an all-time high in the previous session and as it goes ex-dividend along with companies such as Cable & Wireless and Kelda Group.