LONDON: UK shares advanced on Wednesday for the second session in a row, boosted by strong results from Dixons Carphone, with investors hoping that an expected rise in U.S. interest rates later would bring calm to volatile markets.
The gains were broad-based, with Dixons Carphone, Britain's largest electricals and mobile phone retailer, among the top risers, up 2.9 percent after reporting a forecast-beating 23 percent rise in first half profit.
The company, which trades as Currys, PC World and Carphone Warehouse in the UK and Ireland, had a strong performance in its home market which helped it outperform rivals.
"Dixons Carphone is emerging as a clear beneficiary as the "internet of things" becomes the new order, and the shares have comfortably outperformed the market of late," Keith Bowman, equity analyst at Hargreaves Lansdown, wrote in a note.
Education publishing company Pearson gained 5 percent after BNP Paribas upgraded it to "outperform" from "neutral", citing hopes new management would refocus the asset mix and allocate capital towards acquisitions and buybacks.
Investors were also cheered by engineering company Rolls-Royce's plans to cut a layer of senior management in order to turn the business around, sending its shares up 2.2 percent. The company has issued four profit warnings in just over a year.
The UK's blue-chip FTSE 100 index was up 0.7 percent at 6,058.65 points by 1024 GMT, outperforming the broader European market.
After the European market close, the Federal Reserve is widely expected to raise U.S. interest rates for the first time in nearly a decade.
"The overriding expectation is for a 25 basis point hike (which is more or less priced in already) while the real market-moving aspect will undoubtedly be the Fed's language for its indications as to the future pace of tightening," analysts Mike van Dulken and Augustin Eden at Accendo Markets wrote in a note.
The prospect of a small hike that could bring some stability to markets helped support commodity-related stocks, with shares in BP up 1.7 percent and Royal Dutch Shell advancing 1.3 percent. Miners BHP Billiton, Antofagasta and Glencore were up between 0.6 percent and 2.7 percent.
British supermarkets found themselves at the bottom of the index following a rally on the back of industry data in the previous session.
"This is a critical time for the retailers ... are they going to get the footfall, how much are the discounters going to bend their sales?" said Danny Cox, chartered financial planner at Hargreaves Lansdown.
Grocer Tesco was down 1.6 percent, followed by Marks & Spencer, Sainsbury and Morrison , which were all down between 0.3 percent to 1 percent.
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