LONDON: UK’s blue-chip index extended gains for the second straight session on Wednesday, as a rally in oil and mining stocks helped counter early gloom amid concerns about tighter U.S. monetary policy.

After falling as much as 0.2%, the FTSE 100 reversed course to gain 0.2%, closing at its highest since February 2020, While the domestically focussed mid-cap index fell -0.5%.

Base metal miners rose 1.9% leading gains on the index. Oil majors BP and Royal Dutch Shell gained about 1.5%, extending gains from the previous session, after OPEC+ producers stuck to an agreed output target rise for February.

“Demand for oil has held up and is proving able to largely withstand the latest coronavirus wave... suggesting a global economy that is becoming more adept at dealing with the problems caused by the virus,” said Stuart Cole, macroeconomist at Equiti Capital.

Prime Minister Boris Johnson said on Tuesday that England could withstand a surge in COVID-19 infections without shutting down the economy as Britain reported another record daily high in cases, fuelled by the Omicron variant.

U.S. stocks were flat or down and Treasury yields largely unchanged Wednesday morning following earlier gains to start the new year and ahead of key Federal Reserve meeting minutes to be released later in the day.

“Evidence of a more robust response being contemplated by the FOMC (Federal Open Market Committee) could see equity markets struggle a bit today,” Cole added.

Some positive brokerage action offset losses on the FTSE 100.

London Stock Exchange Group gained 1.7% after Citigroup upgraded its shares to “buy”, while online grocer Ocado and plumbing products distributor Ferguson added 4.9% and 0.5%, respectively, following rating upgrades by Berenberg.