LONDON MARKETS: Miners Lead FTSE 100 Higher After China Comments

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Miners led U.K. stocks higher on Wednesday, after China's new leadership implied that its supportive economic policy would remain in place in the near future.

The FTSE 100 index rose 0.3% to 5,888.39.

Shares of Tesco PLC (TESO) posted one the biggest gains in the index, up 3.2%, after the supermarkets retailer said it would conduct a strategic review of its Fresh & Easy business in the U.S., as it is clear it "will not deliver acceptable shareholder returns on an appropriate time frame in its current form."

In addition, Tesco announced that its deputy chief executive Tim Mason, will be leaving the firm after 30 years' service.

On a sector-specific basis, mining shares put on the best performance, taking a cue from comments from China's new leadership. The Communist Politburo said the economy is stabilizing, but that it would keep its accommodative stance in coming months.

Resource firms tend to rise on growth indications from China, as the country is a major user of natural resources.

Shares of Rio Tinto PLC (RIO) rose 3%, BHP Billiton PLC (BHP) added 2.3% and Anglo American PLC gained 3.1%. Metals prices were rising across the board.

Also on investors' minds in the U.K., Chancellor of the Exchequer George Osborne delivered his autumn statement and said the U.K. economy will shrink 0.1% in 2012, down from a previous forecast of 0.8% growth. He also ordered a squeeze on welfare benefits, as the budget deficit looked set to be higher than expected, according to media reports.

Banks tracked their European counterparts higher, after Citigroup lifted the region's banking sector to overweight. Standard Chartered PLC rose 1.5% and Barclays PLC (BCS) picked up 0.8%. Shares of HSBC Holdings PLC (HBC) added 1%, as it's selling its entire stake in Ping An Insurance (Group) Co. of China Ltd. for 72.74 billion Hong Kong dollars ($9.39 billion).

Shares of Sage Group PLC dropped 3.7%, after the software firm reported full-year earnings and said underlying earnings per share dropped compared to last year due to an increase in taxes.

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