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LONDON (Alliance News) - UK stocks were trading mixed midday Wednesday, with mining and oil stocks leading gains on firmer commodity prices and broker upgrades, while Tesco's management said they are confident they can rebuild the grocer's financial performance and reputation.

The FTSE 100 index was up 0.3% at 6,345.32, while the FTSE 250 was down 0.5% at 17,044.87 and the AIM All-Share traded up 0.2% at 734.67.

European shares were trading higher, with the CAC 40 index in Paris up 0.5% and the DAX 30 in Frankfurt up 0.8%.

US futures pointed to a higher open on Wall Street. The Dow Jones Industrial Average was indicated up 0.5%. The S&P 500 index also was indicated up 0.5%, and the Nasdaq 100 was pointed up 0.7%.

Miners dominated the top performers in both the FTSE 100 and FTSE 250 as prices of metals recovered. Jasper Lawler, market analyst at CMC Markets, said that a re-basing higher of metal prices such as copper and silver, alongside a rebound in Glencore shares, has catalysed a huge about-turn in the London mining sector. Glencore has seen a strong rebound after hitting an all-time low on Monday last week. The FTSE 100 stock was trading up 4.0% on Wednesday.

Meanwhile, Anglo American was up 10%, making it the best blue-chip performer having received the additional benefit of being upgraded to Equal-Weight from Underweight by Morgan Stanley. Rio Tinto traded up 7.4%, having also been upgraded by Morgan Stanley, while Antofagasta gained 6.2%.

In the FTSE 250, Vedanta Resources traded up 14%, Evraz was up 6.7% and KAZ Minerals was up 5.2%. The FTSE 350 mining sector index was reading up 5.7%.

A surge in oil prices was helping to support oil-related stocks, with heavyweight oil majors Royal Dutch Shell 'B' and BP both trading up 2.5%. Brent oil touched a price of USD52.92 a barrel, its highest level since September 1. West Texas Intermediate reached a high of USD49.68 a barrel, its highest price since late July.

On the other side of the index, travel companies, which are large consumers of oil were taking a hit. Budget airline easyJet traded down 4.2%, cruise operator Carnival was down 4.4% and International Consolidated Airlines Group was down 4.6%.

Elsewhere, Tesco continued to make progress with its turnaround strategy, swinging back to profit in the first half of its financial year.

The UK's largest retailer is trying to pick itself up after a terrible year which saw it make a pretax loss of GBP6.38 billion in the 12 months to February 28, as it booked a staggering GBP7.0 billion of impairments, writedowns and restructuring charges.

On Wednesday, the supermarket chain reported a GBP74 million pretax profit in the 26 weeks ended August 29, an improvement on the GBP19 million pretax loss a year before. Revenue, however, fell 1.9% to GBP23.94 billion from GBP24.27 billion.

Chief Executive Dave Lewis told journalists that Tesco had decided to retain its customer data business Dunnhumby, which had been up for sale, as improving cash generation means the sale was not necessary and that keeping it creates more value for shareholders, although he also said that he did not want to sell the business for less than the company believed it was worth.

Lewis added that Tesco does not intend to dispose of any more major assets. Tesco shares were up 0.5%.

Anheuser-Busch InBev on Wednesday said it has tabled an offer to acquire fellow brewing giant SABMiller, having seen two other informal offers rejected, and said it thinks its new bid should be "highly attractive" to SABMiller shareholders.

Tobacco firm Altria, a major shareholder in SABMiller, said it supports AB InBev's offer. SABMiller responded by saying its board will meet to discuss the new bid, after confirming it had rejected the previous offers as the board felt they undervalued the company.

AB InBev said its bid values SABMiller at 4,215p per share, or GBP68.2 billion overall. SABMiller traded up 1.2% at 3,664.50p at midday.

In the AIM All-Share index, Strat Aero shares were up 9.0%. The drone maker said it has signed a joint venture agreement with UAV Airways to establish remotely piloted aircraft and systems training centres as well as delivering training courses in overseas territories.

Strat Aero said the joint venture will enable it to create a comprehensive portfolio of RPAS training and a broad pool of qualified UAV operators which will in turn allow it to accelerate the delivery of its UAV services. Strat Aero will provide the start-up funding for the joint venture, while UAVAir will licence the intellectual property of the course and training material and provide training school setup services until the schools are self-sufficient.

On the economic front, UK industrial output rebounded at a faster-than-expected pace in August, driven by oil extraction and transport equipment. Industrial production grew 1% from July, reversing a 0.3% drop in the prior month, data from the Office for National Statistics showed Wednesday. Economists had forecast only a 0.3% rise for August.

At the same time, manufacturing advanced 0.5% in August from the previous month, partially offsetting a 0.7% fall in July. It was also faster than the expected 0.3% increase. However, on an annual basis manufacturing production declined 0.8%, with economists expecting it do edge only 0.1% lower. IHS Global Insight Economist Howard Archer said weakened manufacturing activity is worrying for hopes that UK growth can become more balanced and less dependent on the services sector and consumer spending.

Still ahead in the economic calendar, UK NIESR gross domestic product estimates are due at 1500 BST. In the US, EIA crude oil stocks are expected at 1530 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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