Stronger miners help Britain's FTSE to bounce back

LONDON -

Britain's top share index bounced back from two-week lows on Thursday, with miners gaining on expectations of an improvement in demand for metals in China, while some positive company results also boosted sentiment.

Investors were also relieved after data showed Britain pulled out of recession in the third quarter, posting its strongest quarterly GDP growth in five years.

The UK mining index <.FTNMX1770> rose 1.5 percent, the best performing sector and mirroring stronger base metals prices after China's industry ministry said the country's factory output should grow faster in the last three months of 2012.

"If you are looking to put tactical bets on this market, the mining sector is the obvious home for that because there are signs of some stabilisation in economic activities, particularly in China, and recent U.S. macroeconomic numbers have been good," Paul Kavanagh, market strategist at Killik & Co, said.

"The other interesting sector is industrials, which has been hurt a little bit by profit warnings. But you could see a bounce back in companies like Cookson, which is one of the better-geared players."

Shares of British industrial materials supplier Cookson , were up 1.6 percent, while miner Anglo American was 1.7 percent higher after reporting increased production volumes in five of its seven key commodities.

At 0822 GMT, Britain's blue-chip index was up 33.43 points, or 0.6 percent, at 5,837.80 points. It slipped to a two-week low in the previous session before closing 0.1 percent higher in choppy trade. The FTSE 250 index <.FTMC> was up 0.6 percent.

Charts showed the FTSE 100 index remained near the low end of its recent range. Analysts said that it was positive to see that the index was holding its immediate support of 5,790.

On the downside, a critical level to watch is 5,742, a low reached earlier this month. A breach of that level would suggest that a corrective phase has begun, analysts said.

MIXED EARNINGS

Corporate earnings remained mixed on Thursday, with companies showing wild share moves depending on their performances.

Consumer goods giant Unilever rose 2.9 percent, topping the gainers' list after posting a 5.9 percent rise in underlying sales in the third quarter, beating analyst forecasts.

However, WPP , the world's largest advertising group, fell 2.7 percent after cutting its full-year outlook for the second time in two months.

"The chart shows that yesterday's decline took the shares down to, and marginally through, their 11-month uptrend and further weakness today would confirm that this key support level has been breached," Bill McNamara, technical analyst at Charles Stanley, said in a note.

"Although WPP already looks relatively oversold following its latest bout of weakness, such a breakdown would still look like a good reason to lighten holdings."

(Editing by Susan Fenton)