London - Britain's top equity index rose on Wednesday to stage a modest recovery from a slump in the previous session, as firmer oil prices enabled heavyweight energy stocks to bounce higher.
The blue-chip FTSE 100 index, which had fallen 2.8 percent in the previous session, rose 0.5 percent to 5,966.01 points in early session trading.
Oil prices stabilised on Wednesday as falling US inventories offset the impact of weak economic data from China, and this in turn propped up the shares of heavyweight energy groups such as BP and Royal Dutch Shell.
“There's a bit of support coming through the oil price, which is acting as a trigger for the FTSE to reclaim some ground,” said Hantec Markets' analyst Richard Perry.
The FTSE 100 raced to a record high of 7,122.74 points in late April but has since fallen back, hit by concerns over an economic slowdown in China and the prospect of an interest rate rise soon in the United States.
Higher interest rates typically hurt stocks as they boost the appeal of bonds and cash by increasing returns on those assets, while the China slowdown has impacted oil and metals prices since China is a major global commodities consumer.
There were more signs of economic weakness in China on Wednesday after data showed that activity in China's factory sector unexpectedly shrank to a 6-1/2 year low in September.
Securequity sales trader Jawaid Afsar said he would look to sell out on rallies on the FTSE, given the backdrop of the China slowdown, and Afsar added that the FTSE was still vulnerable of falling down to last month's low level of 5,768 points.
The FTSE 100 is down by nearly 10 percent since the start of 2015.
REUTERS