Britain's top share index rose on Thursday as miners gained on firmer metals prices which were boosted by a brightening demand outlook, while mobile phone heavyweight Vodafone rose after an upgrade from Nomura.
Gains were offset by weaker defensive tobacco and pharmaceuticals stocks as investors switched to companies more geared to economic growth.
By 0758 GMT the FTSE 100 was 21.00 points, or 0.4% higher after it gained 1.5% on Wednesday, its best closing level since April 26. The index has gained 10 since the start of September.
U.S. stock indexes hit their highest level in five months on Wednesday as stronger-than-expected earnings from JP Morgan Cazenove and Intel and the U.S. dollar tumbled to a 10-month low.
The strong earnings and weak dollar both helped metal prices extend recent lofty gains with copper reaching a new 27-month high, which in turn prompted gains in miners. Xstrata gained 2.3% and Lonmin added 1.1%.
"It's a culmination of weaker dollar prices and commodity prices looking attractive," Yusuf Heusen, senior sales trader at IG Index said.
"The markets shrugged off weaker data previously and more recently the data's been stronger, so there's a continuation of the rise."
African Barrick Gold led fallers, however, down 8.9% after it cut its 2010 production target for the second time in three months after it uncovered fuel theft at its new Buzwagi mine and suspended 40% of miners there.
VODAFONE VIBRANT
Vodafone provided the biggest single boost to the index, gaining 1.8% after Nomura upgraded it to "buy" from "neutral" citing positive earnings momentum.
Other stocks perceived as being resilient in the face of economic hard times were weaker, however, as investors switched to more cyclical stocks, with Imperial Tobacco down 1.3% and drugmaker AstraZeneca off 0.3%.
ARM Holdings was up 1.7%, lifted by the strong results from U.S. rival Intel.
No British data is due for release on Thursday, so investors will look to U.S. September producer prices, August international trade figures, and the latest weekly jobless claims numbers to provide some macroeconomic direction in the afternoon.
September PPI is seen up 0.2% on the month, and ahead 3.7% year-on-year, after 0.4 and 3.1% increases respectively for wholesale inflation in August.
"We'll see what happens in the U.S., if there is poor data and it's shrugged off, it's another bullish sign," said Heusen at IG index.
Technical levels were also being closely watched, with the next significant resistance at 5,795, a peak level hit three times in April just after the previous peak at 5,835, said Michael Hewson, markets analyst at CMC Markets.
