By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- U.K. stocks advanced Wednesday, albeit in thin trading conditions, as traders bet that the recovery in the economy can continue without interest rates being raised.
The U.K. FTSE 100 (UK:UKX 5,324, +38.11, +0.72%) rose 0.6% to 5,317.96, matching gains in other European capitals.
At 2:15 p.m. Eastern time -- well after the close of trading in London -- the Federal Reserve is due to announce its interest-rate decisions. While no change in rates is expected, markets will be on guard for any move in the language accompanying the decision as well as looking to see if the central bank reins in any of its liquidity provisions.
But economic reports have been on the encouraging side, as euro-zone gauges of manufacturing and services sentiment rose to multi-month highs and as jobless claims fell in the U.K. by 6,300 in November, the first drop since February 2008.
Heavyweights HSBC Holdings (UK:HSBA 708.60, +6.60, +0.94%) , BP (UK:BP. 582.50, +3.60, +0.62%) , Vodafone Group (UK:VOD 141.95, +1.10, +0.78%) , GlaxoSmithKline (UK:GSK 1,326, +15.50, +1.18%) and Royal Dutch Shell (UK:RDSA 1,833, +13.00, +0.71%) all rose.
Only Glaxo had significant news to report, expanding an existing arthritis pact with Galapagos (BE:GLPG 8.39, +0.11, +1.33%) to a potential value of more than 200 million euros ($291 million).
A note from Nomura helped drive U.K. media stocks. The broker said the late-cycle end of the media sector has lagged cyclicals since the market turn in mid-March and now offers better value, as it prefers professional publishers, agency and satellite/cable sub-sectors and recommends avoiding direct and most of the free-to-air TV companies.
Reed Elsevier (UK:REL 492.40, +9.70, +2.01%) , its top pick, rose 1.7%.
BSkyB (UK:BSY 569.50, +0.50, +0.09%) was flat after Nomura downgraded the satellite broadcaster to neutral from buy. BSkyB is 39% held by News Corp., which also owns MarketWatch, the publisher of this report.
Outside the FTSE 100, shares of United Business Media (UK:UBM 458.50, +6.80, +1.51%) rose 2.7% and Informa (UK:INF 299.20, +3.70, +1.25%) shares 1.5% as Nomura upgraded the pair to buy from neutral.
Barratt Developments (UK:BDEV 114.60, +5.00, +4.57%) , Redrow (UK:RDW 129.50, +7.30, +5.96%) and Taylor Wimpey (UK:TW. 35.17, +1.17, +3.46%) each rose between 2% and 6% as Citigroup upgraded all three to buy from hold, noting that house prices, mortgage applications, housing transactions and consumer confidence all have improved and the sector could even withstand a modest fall in house prices without having to cut asset values.
Shares of Laird (UK:LRD 112.90, +3.60, +3.30%) climbed 3% as the wireless systems and electronic-components maker said underlying pretax profit will be in line with expectations.
