UK shares edged up on Tuesday, helped by expectations of higher mining output this year but unable to move above a fresh 4-1/2 year peak set in the previous session.
The FTSE 100 recovered from early falls in the session, finding support around 6,100 and from steady inflation data, but was still 0.4 percent lower than the new 4-1/2 year high of 6,133.41 posted in Monday's trade.
“With the Chinese GDP data out on Friday this week, there's a lack of drivers at the moment. We're in a 50 point range which I think will continue until later in the week,” Jack Pollard, analyst at Sucden Financial Private Clients, said.
At 12:30 SA time, the FTSE 100 index was up 0.96 points, or 0.01 percent at 6,108.82, having shed 0.2 percent on Monday after reaching its highest since mid-2008 early in the session. The index is up over 2 percent since the start of 2013.
Gains by miners and materials provided the main strength for the blue chips, adding over 4 points to the index, as upbeat production news from Rio Tinto buoyed the sector after falls on Monday.
The global miner added 0.4 percent having been up as much as 2.3 percent after it said it aims to boost iron ore output by 15 percent this year as resurgent Chinese demand drives a price recovery. Production in 2012 climbed to 253 million tonnes, beating the firm's own guidance.
“Resource stocks in general are doing fairly well, and the news from Rio Tinto is supporting that, although into the tail-end of the week global macro data will take over as the main driver,” Pollard said.
Leading the miners - and the index - up was ENRC rising 4.4 percent, extending gains made in the previous session following a Credit Suisse upgrade. The Daily Mail newspaper suggested the Kazakh-based miner had also risen on Monday on speculation it had turned down a bid approach from major shareholder Alijan Ibragimov.
Burberry Group was just behind ENRC on the list of top blue chip gainers, gaining 4.2 percent as the British luxury brand posted a 9 percent rise in third-quarter underlying revenue.
“The key good news is the recovery of retail (sales) like-for-likes from 1 percent in the previous quarter to 6 percent in the third quarter,” BofA ML said in a note, raising its rating to 'buy' from 'neutral', and upgrading its earnings forecasts by up to 4 percent.
“Given the concerns surrounding the brand since the profit warning, this acceleration should support sentiment in the shares.”
Tuesday's share price hike in early trade has restored Burberry to its levels in September just before it shed over 20 percent after issuing a profit warning.
Despite trading at a relatively high forward 12-month price-to-earnings multiple of 17.9, top-rated analysts in the sector expect Burberry to post a positive earnings surprise of 1.6 percent over the next 12-months, second only to Swiss watch-maker Swatch among peers, according to Thomson Reuters Starmine data. - Reuters