By Khushi Singh and Bansari Mayur Kamdar
(Reuters) -British shares snapped a three-day losing streak on Thursday, with consumer staples boosting the benchmark FTSE 100 index, though shares of Metro Bank slumped on reports of an urgent capital raise.
The benchmark FTSE 100 index gained 0.5%, while the domestically-focused FTSE 250 index rose 0.6%, rebounding from near one-year lows hit in the previous session.
Imperial Brands (LON:IMB) gained 3.9% after the cigarette maker announced a $1.34 billion share buyback programme and reaffirmed its annual forecast.
Tesco (LON:TSCO) rose 3.6% after multiple brokerages raised their target price on the retailer following its upbeat annual forecast.
Also helping sentiment, the global bond sell-off paused after a cooler-than-expected U.S. private payrolls report and a slide in oil prices.
Metro Bank tumbled 25.7% following reports it was exploring options to raise as much as 600 million pounds ($728 million) in debt and equity to bolster its finances, the latest in a string of setbacks to befall the lender.
"Initially it rallied to a high of over £40 in 2018, but now it trades at around just a fifth of its flotation price, currently at around £4 a share, reflecting the major lack of confidence in the business among investors and its balance sheet woes," said Victoria Scholar, head of investment at Interactive Investor.
Construction and materials stocks climbed 1.1% after shares of ventilation products supplier Volution Group rose 8.4% on higher annual revenue.
Ferrexpo (LON:FXPO) rose 6.4% after the Ukraine-focused producer of premium iron ore pellets posted a 17% spike in total third-quarter production.
Meanwhile, industry data showed new car sales in Britain rose about 20% in September, driven by an increase in registrations by fleets.