FTSE gains as metals spur miners
The FTSE 100 share index rose 0.8 percent on Tuesday, bouncing from its previous day's drop as fund manager Schroders jumped into the lead on results and robust precious metal prices boosted miners.
FTSE falls on banks and oilSchroders rose 4.3 percent after reporting that pre-tax profit for 2007 rose 35 percent to 392.5 million pounds, up from 290.0 million pounds in 2006.
By 8:47 a.m. the UK benchmark index was 47.8 points higher at 5,866.4. The index closed down 1.1 percent in the previous session as weak U.S. data and recent credit-related writedowns prompted investors to fret over a possible U.S. recession.
"It's a better start than we've had for some time," said Peter Dixon, an economist at Commerzbank, but he added that the rally was unlikely to continue.
"The Bank of England is unlikely to surprise us this week with any rate cuts, therefore I don't think markets in the UK are going to get any support from that angle, so its going to be a U.S.-driven week," he added.
The Bank of England is widely expected to leave interest rates unchanged at 5.25 percent on Thursday as it juggles the risk of a slowing economy against rising inflation pressures.
"There's just too much negative news coming out of the U.S. which is ultimately going to affect European markets... We're going to have another six weeks or so of reasonably sideways trading."
Financial stocks bounced after falling in the previous session. Royal Bank of Scotland rose 2.8 percent and Barclays added 2.4 percent. But HSBC fell 0.8 percent after jumping on results.
Across the Atlantic, U.S. stocks were mostly unchanged on Monday as soaring commodity prices lifted Alcoa and Exxon Mobil , while fresh fears over another mortgage lender and another spate of weak economic data dragged on financials.
Japan's Nikkei also ended flat overnight.
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