British shares inched up on Wednesday, supported by higher commodity stocks and a rally in drugmaker Hikma following better than expected earnings growth, but concerns over Brexit continued to dampen the mood. The bluechip FTSE 100 index was up 0.2 percent at its close, recovering losses made in the previous session when banks fell on concerns over the imminent triggering of talks to leave the European Union. In spite of the bounce, concerns over Brexit kept investors cautious.
"Traders remain sellers on rallies as the Brexit uncertainties weigh on the sentiment," said Ipek Ozkardeskaya Senior Market Analyst at London Capital Group. While markets were focusing on the outcomes of the US Federal Reserve rate-setting meeting and the Dutch general election, investors in Britain also paid attention to data on the labour market released earlier in the day.
UK unemployment fell unexpectedly to its lowest for more than a decade in the three months to January but pay growth worsened in an unpromising sign for the economy before Britain leaves the European Union. The figures weighed on sterling, helping the FTSE slightly extend gains, but the more domestically focused mid-cap FTSE 250 index spent the majority of the session in negative territory, ending up just 0.1 percent.
Hikma, however, was the top riser, gaining 8 percent after the drugmaker posted a 2.4 percent rise in full-year operating profit on growth in its injectables and branded business, which offset weakness in its generic drugs. "Results were ahead driven by blowout injectables. 2017 guidance was in-line at group level and we believe this leaves upside in injectables," Jefferies analyst James Vane-Tempest said.
Among commodity stocks, heavyweight miners Antofagasta and Anglo American rose on the back of rising copper prices, although traders stayed on the sidelines ahead of the interest rate decision in the United States which may spark volatility in the dollar. Glencore gained almost 3 percent, further supported by an upgrade from Goldman Sachs to "buy" from "neutral". Oil stocks were boosted after crude prices rebounded from three-month lows following industry data showing a surprise drawdown in US crude stockpiles and as Goldman Sachs put a positive spin on Opec's compliance with output cuts.
Oil major Royal Dutch Shell rose 0.7 percent.