London: Britain’s top shares rose early on Wednesday, led by AstraZeneca which gained after winning a US drug patent case, and BP rallying from near 14-year lows due to the worst US oil spill ever.
By 0848 GMT, the FTSE 100 was up 20.90 points, or 0.4% at 4,935.12, having closed down 3.1% on Tuesday at its lowest close since 4 September 2009, and posting its biggest one-day percentage fall since 14 May 2010.
AstraZeneca provided the main strength for the blue chips, up 10.2% after the drugmaker won a key patent trial in the United States involving its blockbuster statin drug Crestor, leading several brokers to upgrade ratings and target prices for the stock.
The news lifted sentiment in the sector, with peers GlaxoSmithKline and Shire up 1.3 and 0.7% respectively.
Elsewhere, BP bounced 5.7% higher as investors picked up stock on the cheap, and with traders citing vague chatter of a possible takeover for the company resurfacing following recent broker comment.
BP is down 52% since its oil spill, the worst US environmental accident, began in the Gulf of Mexico in mid-April.
However, the season’s first Atlantic hurricane is disrupting cleanup of BP’s massive oil spill, delaying plans to boost containment capacity and threatening to push more oily water onshore.
Meanwhile, Essar Energy gained 2.8% following recent bullish broker comment and Tullow Oil added 1%.
“There’s a certain amount of bottom fishing going on here considering the falls of yesterday,” said Geoff Wilkinson, head of research at Mint.
“Given global growth concerns, fears of a double dip recession and crystallised evidence of US investors having second thoughts ... I am not sure what the fundamental motivation is for buying equities from here,” he said.
Banks staged a minor rally but remained hamstrung by doubts over their exposure to Europe’s debt crisis and potential austere measures placed on them as governments look to solve their debt problems.
Barclays and Royal Bank of Scotland were up 1.7 and 1.5% respectively, while Lloyds Banking Group gained 1.3%.
However, Standard Chartered, which issued its first-half update on Monday, fell 0.1% and HSBC was down 0.2%.
Miners were good performers along with metal prices which rebounded from Tuesday’s falls when traders were spooked by fears that growth in Asia may not be as strong as expected.
Fresnillo up 1.1% was the best performer in the sector, while Xstrata added 0.6%. Miners have fallen 12.5% since 21 June, leading the market retreat on concerns over the sustainability of the global economic recovery.
Meanwhile, talks between the Australian government and mining companies continued over a deal on a proposed mining tax.
On the downside, Vodafone shed 1.7% as Goldman Sachs substantially lowered its estimates on the mobile telecoms giant to reflect recent currency headwinds, austerity pressures in Europe and mid-term competitive risks.
The mid cap index underperformed the blue chips in early trade, led lower by housebuilders which fell after the Nationwide building society said British house prices rose just 0.1% on the month in June, down from a 0.5% rise in May, in a further sign that the housing market recovery is cooling.
Redrow and Persimmon were the top FTSE 250 fallers down 3.9 and 3.6% respectively.