By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- The U.K.'s FTSE 100 index rallied on Thursday, on track for the highest close in three weeks, as investors awaited the latest policy decision from the Bank of England.
The benchmark jumped 0.9% to 6,533.57, on course for a second day of gains.
Most stocks traded in positive territory, with InterContinental Hotels Group PLC topping the index. The hotels operator gained 3.5% after UBS lifted the firm to buy from neutral, with the analysts citing improvements in a number of areas of concern and recent share-price weakness as the main reasons for the upgrade.
In the same vein, Marks & Spencer Group PLC rose 2.9% after HSBC lifted the retailer to overweight from neutral.
More broadly, investors in the U.K. were waiting for an interest-rate decision from the Bank of England, due at noon in London, or 7 a.m. Eastern Time. Most analysts expect the central bank to keep its key lending rate at a record low of 0.5% and make no changes to its asset-purchases program, on the back of recent signs the British economy is picking up. More signs of the upbeat trend came in on Wednesday, when data showed U.K. business activity in August expanded at the fastest rate since December 2006.
The British pound was trading mixed against other major currencies ahead of the rate decision, with the U.K. currency (GBPUSD) exchanging hands at $1.5602, down from $1.5628 on late Wednesday.
Banks were among the notable movers in London. Shares of Lloyds Banking Group PLC (LYG) rose 2%, Royal Bank of Scotland Group PLC (RBS) gained 2%, and heavyweight HSBC Holdings PLC (HBC) picked up 1.9%.
On a more downbeat note, shares of GlaxoSmithKline PLC fell 0.8% after the drug maker said its cancer drug MAGE-A3 missed a trial goal.
-Sara Sjolin; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
09-05-13 0444ETCopyright (c) 2013 Dow Jones & Company, Inc.
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