* FTSE 100 up 0.3 pct
* Miners extend China data induced gains
* Housebuilders buoyed by upbeat house price data
By Tricia Wright
LONDON, July 2 British shares rose on Wednesday,
taking their cue from overnight gains on Wall Street and in
Asia, with mining stocks drawing continued support from recent
upbeat data out of China, the world's top metals consumer.
Miners rose 0.9 percent, the best performing
sector, extending gains from Tuesday when factory activity data
from China reinforced signs of stabilisation in its economy.
"It's just a spillover from yesterday," Michael Hewson, CMC
Markets' senior analyst said.
"(Miners) have been some of the worst performers over the
past two or three years and they're just getting a little bit
more buying interest on the back of the fact that people think
that copper prices and commodity prices are going to edge up."
The FTSE 100 was up 21.12 points, or 0.3 percent, at
6,824.04 points by 0815 GMT, having kicked off the third quarter
with aplomb - rising 0.9 percent to notch its biggest one-day
percentage gain in two months in the previous session.
In the United States, the Dow and the S&P 500
hit all-time highs on Tuesday, lifted by equally robust domestic
manufacturing data in addition to the strong China data. Asian
stocks hit a three-year peak on Wednesday.
In London, Rio Tinto and BHP Billiton both
advanced 1 percent.
Miners account for 10 percent of the FTSE 100 index. The
sectoral FTSE 350 mining index ended the first half of the year
up by a meagre 0.5 percent, capped by a continued fall in the
price of metals such as iron ore and copper.
Copper accounted for 12 percent of Rio's and 22 percent of
BHP Billiton's revenues last year, with iron ore the largest
revenue source for both companies.
Some strength was seen from the housebuilders after figures
from mortgage lender Nationwide showing British house prices
rose at their fastest annual pace in more than nine years last
Blue-chip Barratt Developments rose 1.1 percent,
while among mid-caps, Bovis Homes and Taylor Wimpey
advanced 1.7 percent and 0.5 percent respectively.
The sector has been rattled in the past weeks on rising
expectations for a UK rate hike before the end of the year, but
analysts and traders view any such weakness as a buying
While higher rates would raise the costs of borrowing to
build, it would also signal the economy, and consequently
funding prospects, were looking brighter. In any case, some
believe that interest rates will not rise for some time yet.
"The sector got clobbered a bit in the sell-off on interest
rate worries. I think our view was that that was probably
overdone," Peel Hunt equity strategist Ian Williams said.
"I just don't see where the inflationary pressure is enough
in the next six months to put rates up in October/November; I
still think it's a much more likely story for next year."
(Editing by Susan Fenton)