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LONDON (Alliance News) - China's commitment to supporting its flagging economy was propping up London's heavyweight mining stocks at midday Wednesday, extending a positive week so far for equities.

A joint statement by the People's Bank of China, National Development and Reform Commission and Ministry of Finance said China plans to provide financial support for industries and reduce its overcapacity. The document stated authorities will help firms to reduce financial costs and accelerate de-stocking. They also plan to adopt liquidity management tools.

In January, the PBoC injected about CNY1.5 trillion in liquidity through lending facilities and pledged supplementary lending to avoid liquidity strain.

China's pledge to support its economy improved sentiment toward miners, for whom the world's second largest economy is a major customer. Anglo American traded up 7.1%, Rio Tinto up 3.6%, and BHP Billiton up 3.6%.

Leading the mining pack, and the FTSE 100 gainers, was Glencore, up 9.6% after it advanced its plan to reduce its burdensome debt pile by refinancing one of its substantial credit facilities earlier than expected, with banks appearing to give the miner a vote of confidence in the current commodities downturn.

Glencore said it has managed to refinance its USD8.45 billion revolving credit facility, which was due to expire in May, by replacing it with a smaller, USD7.70 billion facility, as the miner continues to take action in order to reduce its debt of nearly USD30.00 billion.

Alongside the material reduction to the facility, the refinancing pushes the expiration date from May this year to May 2018.

After closing higher in each of the past three sessions, the FTSE 100 index continued higher at midday Wednesday, up 1.5% at 5,952.12 points. The FTSE 250 index was up 1.8% at 15,977.40 and the AIM All-Share up 0.7% at 676.55.

In Europe, the CAC 40 index in Paris was up 2.0% and the DAX 30 in Frankfurt was up 1.8%.

A positive start also is expected on Wall Street, with futures pointing the Dow Jones Industrial Average up 0.7%, and the S&P 500 and Nasdaq 100 indices both up 0.8%.

In economic news, the UK unemployment rate remained stable in the fourth quarter of 2015 according to data from the Office for National Statistics.

The unemployment rate came in at 5.1% in the three months to December, the same as in three months to November. Economists had forecast the rate to fall to 5.0%, but the rate remained at its lowest since early 2006.

Average earnings including bonuses increased by 1.9% in the fourth quarter, in line with expectations, but slower than the 2.1% growth seen in the three months to November. Excluding bonuses, earnings climbed 2.0% compared with a year earlier, faster than expectations of a 1.8% rise.

Economists said that while unemployment held steady, wages will need to see a faster rise for the Bank of England to consider raising interest rates above the current 0.5%.

"The ongoing combination of firm employment gains alongside weak wage growth remains difficult to reconcile," said economists at Lloyds Bank.

"Unless wage growth starts to show more material signs of strength, the Bank of England is likely to remain content to keep the Bank Rate on hold at 0.5%," Lloyds added.

The central bank's next scheduled interest rate announcement is on March 17.

Sam Hill, senior UK economist at RBC Capital Markets, said the tighter labour market pushing up wages is one way of offsetting the downward pressure on headline inflation from weak commodity prices. However, at current levels, the growth in wages is unlikely to concern the Bank of England's Monetary Policy Committee.

"Even if average earnings growth does pick up towards 3% this year in the broader context of the inflationary outlook it seems unlikely to be enough to provoke the MPC to tighten policy before early 2017," Hill said.

The pound initially fell following the data but quickly overturned its losses and appreciated against other currencies. At midday, the pound traded the euro at EUR1.2841 and the dollar at USD1.4311.

Rolls-Royce Holdings traded up 4.7% after the Financial Times reported the engine maker is preparing to grant activist investor ValueAct a seat on its board, giving the US-based hedge fund influence over the direction of the business as it seeks to recover from a string of profit warnings

ValueAct is the largest shareholder in the company with a 10% stake and has met with other leading investors in the group in recent weeks to assuage concerns about its intentions should it be given a seat on the board.

Rolls-Royce told the FT no decision has yet been made on whether to support or reject ValueAct's request for a seat.

Electrocomponents was one of the best performers in the FTSE 250, up 7.5% after HSBC upgraded the electronic and maintenance products distributor's stock to Buy from Hold. The bank said the current pressure on margins in the electronic distribution market is not structural, and the company has "levers to pull" to stabilise margins.

Industrial products manufacturer and distributor 600 Group said conditions have remained tough in the second half of its financial year and it anticipates it will miss market expectations.

The company said market conditions have remained difficult, with customers still hesitant to commit to orders. The weakness in the European market it saw in the first half has continued and has been accompanied by a softer US market, particularly in its machine tools unit.

The stock was the worst performer in London, down 25%.

Still ahead in the economic calendar, the US producer price index is expected at 1330 GMT and the Redbook index is at 1355 GMT. US Industrial production is due at 1415 GMT. After the London close, the Federal Reserve releases the minutes of its January 26-27 meeting at 1900 GMT.

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

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