Mining groups surge on steadier commodity prices

LONDON: Share prices of mining groups surged on Wednesday as commodity markets steadied, providing a pre-Christmas bounce to European stock markets.

Approaching midday, London's benchmark FTSE 100 index was up 1.7 percent compared with Tuesday's close.

Robust gains for heavyweight miners and oil majors offset surprise news of weaker-than-expected growth for Britain's economy.

"Despite this morning's UK GDP figure... the markets have remained in the festive mood this Wednesday, with the prospect of a positive US open keeping spirits high," said Connor Campbell, analyst at Spreadex trading group.

The FTSE was aided also by "sustained gains from its commodity sector", he added.

In eurozone midday deals, Frankfurt's DAX 30 stocks index was 1.7-percent higher and the Paris CAC 40 rallied 1.8 percent.

Madrid's IBEX 35 index continued its recovery from heavy losses at the start of the week, winning 1.9 percent.

In foreign exchange, the euro dropped to $1.0922.

Asian stock markets meanwhile extended their gains Wednesday, with buying supported by another Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world's top economy.

The figures settled some nerves on global markets after traders had grown concerned about the outlook owing to recent plunges for oil prices and weakness outside the United States, particularly in China.

Last week's euphoria over the Federal Reserve's interest rate rise, which had boosted overall confidence in the economy, had also started to give way to caution about the US central bank's plans for its next rise.

In London on Wednesday, shares in resources shares surged, led by mining group Glencore which won 7.4 percent to 92.2 pence. Anglo American was close behind, soaring 6.3 percent, while BHP Billiton advanced 6.0 percent.

Oil stocks were also robust, with BP up 3.2 percent and BG Group gaining 4.8 percent, as crude futures recovered from 11-year lows hit earlier in the week.

"So far, the benefits in lower oil prices have been in the main with airline stocks, and the market in general is interpreting the decline as an assessment of the global economy and lack of demand, not simply a supply glut issue," said Brenda Kelly, head analyst at LCG trading group.