Miners, which now trade above their 20- and 50-day moving average, led the gains as investors refocused on stocks that provide hopes for earnings growth.
INDUSTRIAL SUPPORT Rolls Royce gained 1.7 per cent after HSBC upgraded the aerospace and defence firm to "overweight", citing growth prospects and shrugging off concerns over the impact of high oil prices. Rolls Royce shares are flat on the year but trade just above their 50-day moving average of around 619 pence, on a forward price-earnings ratio of 13.8 times compared with a sector average of 10.4, Thomson Reuters data showed.
"The updates companies have been giving investors since the oil price picked up have indicated that price can be passed on and that demand is holding up," Colin McLean, managing director at the 650 million pound ($1.04 billion) Scottish Value Management in Edinburgh, said.
He said industrials; tech stocks and chemicals producers look well placed. Industrials such as IMI and Weir Group, up 1.9 and 1.2 per cent respectively, benefitted from an upbeat note on the sector from RBC Capital Markets. IMI was RBC's top pick but it said Invensys and Smiths Group, down 2.3 and 1.1 per cent respectively, may underperform UK peers.
Smiths, Anglo American, British Land, British Sky Broadcasting, Eurasian Natural Resources and Prudential all traded without their dividend attractions. Traders said bid talk boosted Centrica, up 2.5 per cent on strong volume, with traders citing talk that Spanish peer Iberdrola was set to make a bid. Traders also cited talk of bid interest in fashion group Burberry, which added 2 per cent.-Reuters