LONDON (Reuters) - The top share index gained 0.4 percent in early trade on Wednesday, led by gains in heavyweight commodity issues and banks after optimistic comments from the Federal Reserve.
By 9:11 a.m., the FTSE 100 index <.FTSE> was 21.81 points firmer at 5,345.77, having closed 31.54 points, or 0.6 percent lower on Tuesday.
"The Fed's comments are helping to lift investor sentiment, driving a rally by commodity stocks, but with the UK GDP revision awaited and Thanksgiving tomorrow, the market remains very volatile," said Mic Mills, senior trader at ETX Capital.
Federal Reserve officials expressed confidence in the sustainability of the U.S. economic recovery, even if they said they do not see employment picking up soon.
The second reading for British third-quarter GDP figures, due at 9:30 a.m., was expected to show a slight upwards revision to a 0.3 percent quarterly decline.
The first estimate showed a 0.4 percent fall, shocking analysts who had expected Britain's economy to pull out of recession in the period.
Commodity stocks moved higher in early deals as gold struck a record high for a second time this week, and as other metal and crude oil prices firmed.
Lonmin , Randgold Resources , Anglo American , BHP Billiton , Kazakhmys , Xstrata , and Fresnillo added 0.8-2.4 percent.
Among the oil majors, BP , BG Group , and Royal Dutch Shell gained 0.5-0.7 percent.
The chief executive of Royal Dutch Shell forecast it would not need to borrow any more money if oil remained around $70 per barrel, the Financial Times reported.
Banks, helped by the Fed optimism, were also in demand after falling on Tuesday. Lloyds Banking Group was up 1.3 percent after its as-expected rights issue pricing on Tuesday, while Royal Bank of Scotland , Barclays , and heavyweight HSBC rose 0.2-0.7 percent.
Among individual blue chip gainers, International Power was a strong riser once more on continuing speculative interest, with the Daily Mail's Market Report suggesting GDF Suez could be a possible bidder for the British generator.
Contract caterer Compass Group took on 4.4 percent after reporting a 33 percent jump in full-year-pretax profit, at the top-end of market expectations.
SHINE OFF JOHNSON MATTHEY
Platinum refiner Johnson Matthey was a big blue-chip faller, losing 2.8 percent after posting a 21 percent drop in first-half pretax profit due to lower precious metal prices and a slowdown in automobile sales.
United Utilities shed 1.7 percent after reduced demand for water from recession-hit businesses and inflated costs weighed on its first-half results.
Peer Severn Trent fell 1.8 percent in continuing reaction to its first-half numbers, released Tuesday, and with water companies cautious ahead of Thursday's final price determination review from industry regulator Ofwat.
Disappointing results also weighed on the London Stock Exchange, off 1.4 percent.
Hedge fund firm Man Group was the top FTSE 100 faller, however, losing 3.4 percent in further reaction to Tuesday's rating downgrade by Credit Suisse and with the stock trading ex-dividend on Wednesday.
Overall ex-dividend factors knocked 1.01 points off the blue chip index, with Amec and Next also losing their dividend attractions.
Investors will have a rash of U.S. data to digest this afternoon, much bought forward because of Thursday's Thanksgiving holiday, including initial weekly jobless claims, October new home sales, and the final reading of the University of Michigan November consumer sentiment numbers.
