Choppy trading in oil and metals prices provided only limited net support to the FTSE index with and easing of immediate fears surrounding the financial sector having a more positive impact.
After a positive overnight trend on Wall Street, Asian equity markets were unable to make fresh headway on Wednesday.
There was, however, a very positive start in European equity markets with the tone boosted by German media reports that the government was preparing contingency plans to support Deutsche Bank if necessary.
As well as boosting European markets, the comments also increased confidence in the UK financial sector, which had an important positive impact on the UK market.
After opening little changed, the FTSE made strong progress in the first hour of trading with a peak above 6,870.
There were comments from Bank of England deputy Governor Shafik that further monetary easing was likely to be required in the future. Shafik also commented that the short-term economic outlook had been better than expected and any policy action would be data dependent.
There was further choppy trading in oil markets with crude prices securing net gains ahead of the US open following comments from Iran officials that it is working with OPEC to secure a supply management agreement.
US economic data had little impact with headline durable goods orders unchanged for August, which was slightly above expectations, while core orders declined 0.4% on the month, which was in line with expectations.
Fed Chair Yellen testified on regulatory and financial matters with no comments on monetary policy.
Crude prices briefly jumped again following a draw in the latest EIA inventories report, although Brent December futures hit selling interest on approach to the $47.50 level.
Gold prices tended to drift lower during the US session, which hampered the UK index to some extent, and US equities also moved lower after the open.
This combination of factors tended to drag the UK index lower in late trading. At the close, the FTSE index rose 41.71 points and 0.61% at 6,849.38.
Reaction to the OPEC talks and trends in oil prices will be monitored closely and the UK lending data will also be monitored on Thursday, although overall trends in global risk appetite are likely to dominate.
SOURCE: Economic Calendar
