By Carla Mozee, MarketWatch
U.K. stocks rose Wednesday, as gains for mining and oil and gas shares helped London’s blue-chip benchmark eat into a loss it suffered in the prior session.
How markets are performing
The FTSE 100 index (FTSE:UK:UKX) rose 0.3% to 7,710.66, with the basic materials group leading advancers while telecom, consumer goods and utility shares lost ground. The benchmark on Tuesday lost 0.7%.
The pound (XTUP:GBPUSD) rose to $1.3412, up from $1.3395 late Tuesday in New York.
What’s driving markets
Advances in prices for oil and metals guided gains for mining and energy companies, which combined make up a roughly 26% weighting on the FTSE 100, according to FactSet data. Oil prices extended gains made Tuesday, spurred by reports that Venezuela may not deliver some of its contracted crude oil exports.
Meanwhile, dollar-denominated prices for most metals including copper and palladium moved higher as the dollar (IFUS:DXY) pulled lower. The rise in metals prices paved the way for higher prices for mining stocks. The dollar fell against the euro (XTUP:EURUSD) after European Central Bank officials on Wednesday indicated that policy makers at the bank’s June 14 meeting will start discussing when it’s appropriate to end its massive bond-buying program.
The FTSE 100 managed to hold gains even as the pound continued to step higher in the wake of Tuesday’s better-than-expected data on the British services sector. Pound strength can hurt the FTSE 100 as revenue made overseas by multinational companies is reduced when those sales are translated back into sterling.
Smurfit Kappa Group PLC (DUB:IE:SK3) topped the FTSE 100 by rising 3.1%, heading for its biggest gain since early March. The advance came after International Paper Co. (NYS:IP) late Tuesday cited lack of engagement by Smurfit Kappa’s board and management for its decision to drop its proposed 8.9 billion-euro ($10.4 billion) offer for the Irish paper and packaging company.
BHP Billiton PLC shares (NYS:BHP) rose 1.5%, with the mining heavyweight landing the first bids for its U.S. shale assets. Those bids value the portfolio at $7 billion to $9 billion, Bloomberg reported late Tuesday .
Checking other mining stocks, shares of Anglo American PLC (LON:UK:AAL) gained 2.2% and Glencore PLC (LON:UK:GLEN) (OTC:GLCNF) rose 1.1%.
WH Smith PLC (LON:UK:SMWH) climbed 5.7% as the newspapers- and bookseller said its sales rose 4% in the 13 weeks to June 2, aided by growth at stores at transportation hubs such as train stations and airports.
Shares of oil major Royal Dutch Shell PLC (LON:UK:RDSB) (NYS:RDS.B) were up 0.4% and those of rival BP PLC (NYS:BP) picked up 0.3%.