Relief returns to markets after missile launch and storm concerns, experts say
London's top-flight index pushed back into positive territory as investor jitters over North Korea's missile launch and Tropical Storm Harvey eased on global markets.
The FTSE 100 Index closed up 27.83 points to 7,365.26, as European markets gave up the gloom from the previous session when Pyongyang fired a ballistic missile over Japan.
Across Europe, Germany's Xetra Dax and the Cac 40 in France both lifted by 0.5%.
Jasper Lawler, head of research at London Capital Group, said: "Relief returned to markets on Wednesday after two days of concern over North Korean missile threats and the huge damage inflicted on Texas by Tropical Storm Harvey.
"Equity benchmarks remain down for the week in a sign that investor sentiment is still fragile. 7300 is proving to be decisive support in the FTSE 100 while the DAX regained 12,000."
On the currency markets, the pound remained ahead against the US dollar despite the greenback getting a leg up from a positive update on the US economy.
Sterling was up 0.1% at 1.293, with US gross domestic product (GDP) growing by 3% in the second quarter, up from 1.2% in the first three months of the year.
The pound was also 0.5% ahead versus the euro at 1.08.
In oil, Brent crude dropped 0.4% to 51.79 US dollars a barrel. Nearly a quarter of America refinery capacity has gone offline following flood damage from Tropical Storm Harvey.
Focusing on UK stocks, Sainsbury's was sitting among the biggest risers following reports the Co-op Group had entered exclusive talks to buy Nisa.
Shares in Sainsury's rose more than 2%, or 5.1p to 235.8p, as Britain's second biggest supermarket is thought to have halted takeover talks for the convenience store operator.
The Co-op is believed to have tabled a £140 million bid for Nisa, whose 1,300 shopkeeper members run 3,000 stores.
Sainsbury's is now said to be awaiting the findings of a Competition and Markets Authority (CMA) probe into the Tesco-Booker deal before making its next move.
Marks & Spencer was also enjoying a positive session on the London market, lifting close to 1% as it looked to franchise out its 27-store business in Hong Kong and Macau.
M&S said it has started discussions with long-term franchise partner Al-Futtaim, which already operates 43 of its stores across seven markets in the Middle East, Singapore and Malaysia.
Shares were up 3p to 317.5p.
Away from the top tier, HSS Hire saw its share price crash more than 11% as it reported mounting half-year losses and warned over full-year results as turnaround efforts took longer than expected.
Shares were down 6.5p to 49p, with the tool hire firm seeing pre-tax losses nearly quadruple to £30.1 million for the six months to July 1 from £7.8 million a year earlier.
It said while its recovery plan had helped return the group to profit in June and driven revenue growth in its beleaguered rental division, progress has been "materially" slower than expected.
The biggest risers on the FTSE 100 Index were Ashtead Group up 77p to 1,672p, G4S up 7.7p to 292.9p, ITV up 3.9p to 156.9p, Associated British Foods up 77p to 3,293p.
The biggest fallers were easyJet down 24p to 1,182p, Provident Financial down 14.5p to 892p, Mediclinic International down 11.5p to 743p, and Johnson Matthey down 41p to 2,756p.