By Kit Rees and Alistair Smout
LONDON (Reuters) - Britain's leading share index rallied on Wednesday, buoyed by results from industrial equipment hire group Ashtead (L:AHT) and by opening gains on Wall Street (N).
The FTSE 100 (FTSE) was up 70.96 points, or 1.2 percent, at 6,129.50 by 1400 GMT, ahead of European indexes, mirroring Wall Street's opening gains. Stocks were more upbeat as investors bet that the U.S. Federal Reserve might delay a much-anticipated rate hike and by the news that the Chinese government had intervened to support its volatile markets.
Data from the United States showed strong second quarter non-farm productivity but disappointing private jobs figures.
The disappointing jobs figures helped to support U.S. stocks as a weak jobs picture could dissuade the Fed from raising rates. But Friday's more comprehensive non-farm payrolls data could be more significant in terms of whether the Federal Reserve decides to raise interest rates this month.
"I think probably really strong (US non-farm payroll) results would send equities lower, because it brings on the prospect of a rate hike in September," Jasper Lawler, analyst at CMC Markets, said.
The FTSE 100 index drew support from gains in mining companies as the price of copper
"Even the China-exposed names, such as miners, we think have fallen too far. Much of the negative news is priced in as the PMI data was not a surprise and we were expecting a weak print," Atif Latif, director of trading at Guardian Stockbrokers, said.
Ashtead, the biggest gainer, was up 5 percent after posting a first-quarter profit rise helped by a rebound in U.S. construction markets.
"Progress in the quarter is thanks to strong execution and a strategy of geographical and sector diversification ... as well as a seasonal improvement in demand following a weather-impacted spring," Mike van Dulken, Head of Research at Accendo Markets, said in a note.
Pharmaceutical company Hikma (L:HIK) was also among biggest gainers, up 4.5 percent, benefiting from upgrades by Barclays (LONDON:BARC) and HSBC respectively.
Among mid-caps, the car parts to bikes retailer Halfords (L:HFD) fell 8.5 percent after a recent boom in bicycle sales dropped off sharply in its second quarter due to wet August weather and increased discounting in the market.
Engineering company Diploma (L:DPLM) was the second heaviest midcap loser, down almost 7 percent, as currency hedging contracts set to expire next year will be replaced by more expensive ones, hitting next financial year's operations.