LONDON: Britain's benchmark stock market index rose to its highest level in four months on Tuesday, lifted by stronger mining and banking stocks.
The blue-chip FTSE 100 index was up 23.23 points, or 0.4 percent to 6,376.75 points, having hit a high of 6,418.25 - a new peak for 2016 and its highest level since early December 2015.
Mining stocks such as Anglo American and BHP Billiton advanced on the back of supportive economic signals coming out of China, the world's second-biggest economy and the leading global consumer of metals.
Rio Tinto also rose 1.5 percent even though it cut its 2017 production guidance from its Australian iron ore mines. Despite that, investors took comfort from an 11 percent rise in overall iron ore shipments.
Fresnillo was the top riser, up 4 percent. The precious metal miner was a beneficiary as silver hit a ten month high.
"We've had a commodity-driven rally since February. However, there is a danger that there may be a pullback soon, given the lingering uncertainty over the Brexit vote in June on Britain's membership of the EU," said Thames Capital Markets' chief strategist Nav Banwait.
The FTSE 100 is up around 3 percent since the start of 2016, but remains nearly 10 percent below a record high of 7,122.74 points reached in April 2015.
The index dipped from its high and underperformed euro zone shares, however. Sterling rallied against the euro and the dollar after two polls showed a healthy lead for the "In" campaign ahead of June's referendum on EU membership.
That made British shares more expensive for holders of other currencies and crimped stocks with global exposure.
"A weak dollar definitely has an impact, and a lot of FTSE companies have a lot of business outside the UK," said Mark Foulds, sales trader at ETX Capital.
HSBC's shares rose 1.5 percent, contributing 5 points to the index's advance, after the bank's chief executive said HSBC was considering a share buyback, with rival banks such as Standard Chartered and Barclays also climbing.
"They tend to follow the big ones, and you don't get much bigger than HSBC. So if they go for a buyback, others might," said ETX Capital's Foulds.
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