London stocks rebounded on Wednesday, led by metal miners and renewed hopes of U.S. interest rate cuts, but caution on the eve of UK parliamentary elections capped further gains.
The blue-chip FTSE 100 was up 0.4%, as of 0800 GMT, after closing at a more than two-month low in the previous session, while the mid-cap FTSE 250 gained 0.4%.
U.S. Federal Reserve Chair Jerome Powell said on Tuesday the country was on a "disinflationary path" but policymakers need more data before cutting rates.
His comments bolstered hopes that the Fed will cut rates sooner rather than later.
Industrial metal miners led gains, rising 1.8%, tracking copper prices higher. [MET/L]
Most sectoral sub-indexes traded higher, with the exception of investment banking and brokerage stocks that fell 0.5%.
The market's focus is now on UK's parliamentary elections on Thursday, where Conservatives look set to be replaced after 14 years in power, as per opinion polls.
"If they (Labour) get a decent majority, they will be able to undertake what they call radical change, (that is) basically stability. I think that's why markets haven't hugely reacted going into it," said Indriatti Van Hien, a UK equities portfolio manager at Janus Henderson Investors.
She also pointed to the polls not having an effect on the Bank of England's rate cut timeline.
On the radar is also non-farm payrolls data in the U.S., due on Friday, which will provide more clues on the Fed's monetary policy path.
Among individual stocks, JD (NASDAQ:JD) Sports hit the bottom of the FTSE 100 index, dropping 3.7%, after Barclays downgraded the retailer to "Underweight" from "Equal-weight".
Topps Tiles dropped 4.2% after the British tile retailer said challenging market conditions had persisted into the second half of the fiscal year amid weakness in the home repair and sales segments.
