By Shashank Nayar and Ambar Warrick
(Reuters) -London's FTSE 100 rose on Wednesday with heavyweight mining, energy and banking shares leading gains before the outcome of a U.S. Federal Reserve meeting, while Playtech (LON:PTEC) dropped on reports of a potential breakup.
The blue-chip FTSE 100 rose 1.3% with Royal Dutch Shell (LON:RDSa), Glencore (LON:GLEN) and HSBC Holdings (LON:HSBA) the top boosts to the index.
The banking sub-index rose 2.6%, tracking higher yields. Expectations of rising interest rates have boosted bank stocks this year.
Global shares steadied after sharp losses earlier this week as investors awaited any hints about faster tightening of monetary policy from the Fed later in the day. [MKTS/GLOB]
The FTSE 100 has gained 1.3% so far this year, significantly outperforming a 4.4% drop in the wider European stock aggregate, helped by cheap valuations, strong banking and energy gains and a lower exposure to technology stocks.
"There is a lot of global rotation out of growth into value stocks and the FTSE 100 is full of value stocks and that is one of the key reasons why the FTSE has outperformed and we expect this trend to carry on," said Keith Temperton, sales trader at Forte Securities.
The domestically focussed mid-cap index was up 1.1% with travel and leisure stocks leading gains.
Britain's Pets At Home jumped 2.7% after the pet supplies retailer raised its profit outlook for fiscal 2022.
Hungary-based carrier Wizz Air (LON:WIZZ) fell 0.2% after it posted a third-quarter operating loss and said the fourth quarter loss was likely to be slightly higher, before an expected improvement in spring.
Gambling software maker Playtech fell 6.9% and was among the worst performers on the mid-cap index after it once again backed a buyout by Aristocrat Leisure, following a report that the London-listed company was exploring a breakup if the deal does not go through.