Britain's FTSE gains as weaker dollar lifts commodities companies

LONDON: UK shares rallied on Thursday as investors cheered the U.S. Federal Reserve's dovish decision to hold rates steady, with a weaker dollar boosting shares in British resources stocks.

The U.S. Federal Reserve held interest rates steady on Wednesday and indicated that moderate U.S. economic growth and "strong job gains" would allow it to tighten policy this year, noting, however, that the U.S. continues to face risks from an uncertain global economy.

The dollar fell against the euro after the statement, pushing shares in British commodities stocks higher as dollar-priced crude oil and metals became cheaper for holders of other currencies.

The FTSE 100 index advanced 0.3 percent to 6,194.18 points by 0930 GMT, outperforming the wider European market.

"The Fed just confirmed what the market was thinking anyway ... the market doesn't like uncertainty, so with a clearer picture, it's given a bit of relief," said Zeg Choudhry, managing director at LONTRAD.

Miners were the top sectoral gainers on the blue-chip index, with the FTSE 350 Mining index jumping 7 percent as the price of copper rallied.

Anglo American was the top riser, leaping over 10 percent after South African authorities approved Sibanye Gold's acquisition of mines belonging to its platinum division Anglo American Platinum.

Fellow miners Glencore, Antofagasta, BHP Billiton and Rio Tinto all rallied between 5.8 percent and 7.8 percent.

Oil and gas stocks BP and Royal Dutch Shell also gained 2.6 percent and 2 percent respectively, tracking the price of oil, which extended its strong gains after the world's biggest suppliers firmed up plans to meet to discuss an output freeze.

Shares in British American Tobacco and Hammerson fell after going ex-dividend, taking around 8 points of the FTSE.

Investors were also looking ahead to a meeting of the Bank of England later in the session, at which policymakers will vote on an interest rate decision, although economists polled by Reuters do not expect the bank to raise rates until early 2017.