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 0.4% to 6,039.97 in midday
trading. Other European markets also rallied, with Spanish and
Italian shares showing the strongest gains after a successful
Portuguese bond auction and reports that the European bailout fund
could be strengthened.
Bank stocks were mostly higher, reflecting gains across
Europe.
Shares in HSBC Holdings (HBC) climbed 3.6%, extending gains from
the previous session, when the stock was upgraded to buy at
Citigroup.
Shares in Barclays PLC (BCS) rose 2.6%, and Standard Chartered
PLC added 1.7%.
Among mid-cap financial stocks, shares of Henderson Group jumped
9.9% after the fund manager said it would buy smaller rival
Gartmore Group in an all-stock deal. Gartmore shares climbed nearly
11%.
Mining stocks benefited from a rise in commodity prices. Shares
of Kazakhmys PLC gained 3%, and Vedanta Resources PLC added
2.7%.
On the downside, shares of several retailers declined after 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% increase in comparable sales, but its shares
dropped 2%.
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 of Tesco PLC dropped 1.4% and
Marks & Spencer Group PLC slipped 0.5%.
Shares of mobile-telecom giant Vodafone Group PLC dropped 1.2%
after the stock was downgraded to equal-weight from overweight at
Barclays Capital.
House builder Barratt Developments PLC was another faller. The
stock lost about 1.8% after the company reported a decline 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.