Top British shares edged higher on Tuesday, led by medical devices maker Smith & Nephew after one of its US peers reported robust earnings and also lifted by mining stocks Rio Tinto and BHP Billiton on the back of a positive analyst note.
Traders said Smith Barney, part of investment bank Citigroup, had issued a note on the sector, naming Rio and BHP among its top picks and predicting good earnings growth for the industry.
The FTSE 100 index of blue-chip shares was up 6.7 points at 4,859 by 8:24 a.m.
The move marked a second day of gains for the FTSE, which finished just shy of 2-1/2 year closing highs on Monday.
"The index has very strong support at 4,800 and I still see the 5,000 level being tested in the first quarter of the year," said Mr Lawrence Peterman of brokers Eden Group.
Smith & Nephew was the top gainer, up 1.6 per cent after its US peer Zimmer reported higher-than-expected quarterly earnings and raised its 2005 profit outlook.
S&N reports year results on Thursday. On the downside, hotel firms including Hilton and Intercontinental were slightly lower, however, as dealers said CSFB had cut its stance on the sector.
In the telecoms sector, mobile phone group Virgin Mobile lost 7.6 percent after its annual revenues per user dropped . The company, which also reported a 37 percent increase in its customer base, blamed the fall on a regulatory cut in tariffs last September.
