By Aude Lagorce, MarketWatch
LONDON (MarketWatch) -- U.K. stocks rose on Thursday, helped by
a rally in the commodities sector, as the European Central Bank
delayed the withdrawal of emergency liquidity and encouraging data
on the state of the U.S. real estate market cane out.
The FTSE 100 index gained 1.1% to 5,742.80 in afternoon trading.
The index snapped a three-day losing streak to close up 2.1% on
Wednesday.
The rally was led by the mining sector, which is particularly
sensitive to economic growth prospects.
The European Central Bank on Thursday said it will continue to
provide as much short-term liquidity as euro-zone banks require
through at least the first quarter of 2011 though it stopped short
of announcing new measures to combat the sovereign-debt crisis
plaguing Europe. As expected, the ECB left its benchmark interest
rate unchanged at 1%.
U.S. stocks opened higher, helped by an unexpected jump in
October pending home sales.
Gains on the U.K. benchmark were led by mining shares. Rio Tinto
PLC (RIO) advanced 4% and Antofagasta PLC gained 2.7%.
African Barrick Gold rallied 2.4% after it said the initial
mineral resource at its Gokona and Nyabigena open pits in Tanzania
indicates potential.
A top gainer on the benchmark index was TUI Travel PLC , which
surged 7.4% after the leisure group reported an 11% increase in
annual operating profit and said it's made progress on its
restructuring.
In the financial sector, shares of Royal Bank of Scotland Group
(RBS) gained 3.3%. The U.K.'s Financial Services Authorities
Thursday said it won't take any enforcement action against the bank
or any individual linked to it following an 18-month investigation
into the circumstances that led to its bailout by taxpayers.
Barclays PLC (BCS) rose 1.5%. The Financial Times newspaper
reported that the bank will cut hundreds of jobs in the U.K. after
being hit by a slowdown in revenues.
In the aerospace sector, engine maker Rolls-Royce Group PLC
underperformed, up just 0.7%, after Australian airline Qantas
Airways Ltd. said it can pursue legal action against the firm.
Qantas last month was forced to ground its entire Airbus A380
fleet, which is equipped with Rolls-Royce engines, after one of
them made an emergency landing in Singapore. The aircraft suffered
an engine failure shortly after takeoff. An inquiry has traced the
problem to a single component in the turbine area of the
Rolls-Royce engine.
Qantas said in a statement Thursday it is in talks with
Rolls-Royce over the "financial and operational" impacts of the
incident.