By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- U.K.'s benchmark stock index moved firmly higher on Tuesday after solid housing data for the country fueled optimism about the economic recovery, while Fresnillo PLC shares rallied after a broker recommendation.

The FTSE 100 index rose 0.6% to close at 6,611.94, after closing with a 0.1% loss on Monday.

The index was buoyed by good news on the housing front. Royal Institute of Chartered Surveyors said its house prices balance rose to +36 in July from +21 the previous month, and was the highest since November 2006 with demand for homes at a four-year peak.

"The good side of this is that interest rates are clearly gaining traction in the economy, driving up both house prices and getting consumers out consuming rather than saving," said Robert Wood, chief U.K. economist at Berenberg.

"With the [Bank of England] saying last week that they expected to keep interest rates on hold until 2016, we are optimistic that the U.K. recovery will gather pace over the next year," he added.

Among notable movers in the index, Fresnillo PLC put on 5.6% after UBS initiated coverage of the miner with a buy rating, saying it is "well positioned to outperform in an uncertain price environment."

Other miners further showed positive moves, tracking most metals prices higher. Rio Tinto PLC (RIO) added 2.2%, Antofagasta PLC put on 2.2% and Glencore Xstrata PLC picked up 2%.

Also on the rise, shares of Resolution Ltd. rose 1.8% after the insurance firm posted a 17% rise in operating earnings per share in the first half.

Shares of GlaxoSmithKline PLC (GSK) put on 0.9% after the drug maker said its HIV drug Tivicay from its joint venture ViiV Healthcare has been approved by the U.S. Food and Drug Administration.

On a more downbeat note, shares of Old Mutual PLC shaved off 2.6% after Nomura cut the financial group to neutral from buy.

Outside the main index in London, shares of Michael Page International PLC dropped 4% after the recruitment firm reported a 10% drop in first-half earnings per share excluding exceptional items.

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