By Simon Kennedy, MarketWatch
LONDON (MarketWatch) -- U.K. stocks climbed Wednesday, helped by
further strong gains for banks and miners, while retailers lost
ground after a trading update from supermarket chain J Sainsbury
PLC.
The benchmark FTSE 100 index rose 0.5% to 6,043.19 in morning
trading, as other European markets also rallied ahead of a
Portuguese debt auction.
Bank stocks were mostly higher. Shares in HSBC Holdings (HBC)
climbed 3%, extending gains from the previous session when it was
upgraded to buy at Citigroup.
Shares in Lloyds Banking Group (LYG), however, edged down 0.3%
after the lender was downgraded to underweight from equal-weight at
Barclays Capital.
Among mid-cap financial stocks, shares in fund manager Henderson
Group jumped over 11% after it agreed to buy smaller rival Gartmore
Group in an all-stock deal. Gartmore shares climbed 12%.
Mining stocks benefitted from a rise in commodity prices. Shares
in Kazakhmys PLC gained 2.9% and Vedanta Resources PLC added
2.7%.
On the downside Wednesday, shares in several retailers were
lower following a trading update from supermarket chain J Sainsbury
PLC .
The retailer reported a 7.5% rise in total sales for the third
quarter and a 5.4% rise in comparable sales, but its shares dropped
1.4%.
Seymour Pierce analyst Kate Calvert said the figures appear to
confirm that Sainsbury achieved the fastest growth of the major
food retailers over the Christmas period. But Calvert stuck to her
sell recommendation, saying that the growth is already reflected in
the group's premium valuation when compared to rivals.
Among other retailers, shares in Tesco PLC dropped 1.2% and
Marks & Spencer Group PLC slipped 0.8%.
House builder Barratt Developments PLC was another faller. The
stock fell around 1% after the company reported a fall in the
number of completions in the first six months of its fiscal year
and said growth for the rest of the year is likely to be
limited.