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Positive earnings boost FTSE

London - Upbeat earnings from Wm Morrison drove strength in supermarkets, buoying investor confidence and helping Britain's top share index rise for a seventh straight day, with miners also adding to gains.

By 12:19 the FTSE 100 was up 30.20 points or 0.7%, at 4 473.82 after it ended 54.87 points, or 1.3% higher on Monday to close at 4 443.62, its highest close since June 11.

"Buyers still have the upper hand," said Philip Gillet, Sales Trader IG Index. "If we see the FSTE 100 decisively break through the 4500 mark it sets up the year's highs at 4700 as the next target."

Wm Morrison was the top riser, adding 9.8% after Britain's fourth largest supermarket group said it expected full-year results to be ahead of expectations.

"The group's cost conscious ethos continues to deliver," Keith Bowman, Equity Analyst at Hargreaves Lansdown Stockbrokers said.

Tesco and Sainsbury also traded higher gaining 1.8% and 2.8%, respectively.

Miners added most points to the index as metal prices held well above July lows.

Antofagasta, Rio Tinto, Anglo American, Eurasion Natural Resources and BHP Billiton added between 0.6% and 2%.

Oils were mixed as crude softened but continued to hover around the $64 mark.

Royal Dutch Shell, Tullow Oil and Cairn Energy rose up to 1.3%, while BP and BG Group fell 0.2% and 0.8% respectively.

Defensive stocks were also well-bid as investors rotated holdings into more recession proof areas after booking gains in cyclical companies like commodity plays and banks.

British American Tobacco, pharmaceutical giant GlaxoSmithKline and medical equipment manufacturer Smith & Nephew added 0.6% to 2.2%.

"There are some early signs that traders are happy to bank windfall profits at these levels," said Gillet.

US Earnings due

Other stocks remained becalmed as traders bided their time ahead of US earnings figures due later on Tuesday.

Eyes will be on a raft of corporate earnings from major US companies, with Yahoo, Apple, Coca-Cola, Merck and DuPont reporting.

The US Federal Reserve has plenty of tools to push borrowing costs up when the economy recovers, Chairman Ben Bernanke said, while his counterparts in Australia turned more upbeat on the outlook for global growth.

Non-food retailers struggled as Next fell 2.3% despite raising profit guidance, as investors booked profits after recent gains and its chief executive warned of the risk of swine flu on consumer behaviour.

Kingfisher and Marks and Spencer lost 2.6% and 0.8% respectively.

Friends Provident was one of the heaviest fallers, down 1.3% after it rejected a revised offer from Resolution, saying the financial buyout firm's structure were "totally inappropriate" for a public company.

-Reuters

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