LONDON: Britain's top share index rallied on Thursday, led by banking stocks which recovered some of the previous session's falls as investors positioned ahead of a European Central Bank meeting and Friday's key US jobs report.
Another raft of blue chip earnings provided direction, with medical products firm Smith & Nephew the top riser and copper miner Antofagasta the biggest faller, as investors gave opposing assessments to the two firm's latest results.
At 0833 GMT, the FTSE 100 index was up 26.98 points, or 0.5 percent at 5,785.74, shedding some of its early gains after weak UK services PMI data.
The index closed 0.9 percent lower on Wednesday and failed to push back above the psychologically important 5,800 level.
US blue chips closed easier but off session lows overnight as weak data in the US and Europe on Wednesday led investors to focus on hopes for more stimulus moves to boost a flagging global economy.
"After reacting badly to yesterday's US private payrolls figures the Dow recovered much of its losses last night, helping give support to London markets this morning," said Andrew Crook, trader at Sucden Financial Private Clients.
"But trading is very thin and volatile with so many British blue chip earnings reports to digest at the moment, and with the main US jobs report due on Friday," Crook added.
Volumes were around 11 percent of the 90-day daily average.
Banks were led higher by Lloyds Banking Group , up 1.2 percent and continuing to be supported by Tuesday's reassuring first-quarter results.
Heavyweight energy stocks also boosted the index as the sector rallied after falls in the previous session.
BP added 0.7 percent after the firm won preliminary court approval of an estimated $7.8 billion settlement to resolve more than 100,000 claims by individuals and businesses stemming from the 2010 Gulf of Mexico oil spill.
Oil & gas producer BG Group bucked the sector trend, shedding 2.9 percent as it accompanied results with news it is to sell its Brazilian gas distribution business Comgas to Cosan for $1.8 billion.
BG's first quarter profits soared on higher oil prices and production, although traders noted some caution on the firm's capital expenditure.
MINERS WEAK
Miners were the biggest drag on blue chip sentiment, led by Antofagasta, down 4.7 percent as the Chilean miner said first quarter copper production dipped almost 13 percent on the last three months of 2011, hit by maintenance at its Los Pelambres mine and damaged equipment at Esperanza, driving up cash costs.
"The ongoing challenges at Esperanza mean that the FY guidance range of 160-175 (thousand tonnes) copper is now likely to be at the lower end, which will likely see us nudge our numbers down," Numis Securities said in a note.
Gold miner Randgold Resources was also weak, shedding 1.6 percent as its first-quarter results disappointed.
On the domestic macroeconomic front, April's British Markit/CIPS services PMI will be released at 0828 GMT, with a reading of 54.2 forecast, down from 55.3 in March, illustrating the weak state of the UK economy.
More importantly, April's US Challenger Layoffs survey will be released at 1130 GMT, which together with US weekly jobless claims numbers at 1230 GMT will provide clues to Friday's key US non-farm payrolls report.
Investors also looked ahead to a European Central Bank policy meeting being held in Barcelona on Thursday, with the bank under pressure to use bond buying and other measures to help some highly-indebted euro zone countries.
Spain holds its first bond sale since Standard & Poor's cut the country's credit rating last week. Spain's borrowing costs are set to rise by more than 1 percentage point, and traders said any disappointment could prompt investors to sell riskier assets such as equities.
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