LONDON (ShareCast) - Equity markets rose on Wednesday morning after strong gains for Asian markets overnight with the focus in the UK turning to George Osborne ahead of his budget statement.

"In a week dominated by Europe and the on-going to-ing and fro-ing in the US with respect to the fiscal cliff, markets will be turning their attention to the tribulations of the UK economy today when the Chancellor of the Exchequer stands up to give the annual Autumn Statement," said market analyst Michael Hewson from CMC Markets.

Whitehall departments will be asked to cut day-to-day spending by 1% - around £950m - in 2013/14 and 2% - about £2.5bn - in 2014/15. Most of these savings will come from cuts to back office functions, a government spokesman said.

Osborne will also update Parliament on the nation's finances, with expectations high that figures from Office for Budget Responsibility will show growth forecasts pared back.

Stocks were also tracking Asian markets higher as sentiment was lifted by increasing optimism about China. Markus Huber, the head of German HNW trading at ETX Capital, said: "Recent changes having taken place in Chinese politics have not only removed a lot of uncertainty in regard where China and the Chinese economy will be heading in the years to come, but traders are also increasingly optimistic that the change in political leadership will be leading to a sharp increase in ‘urbanisation’ which should lead to an increase in consumption and investment and consequently provide a strong boost to the economy as a whole."

FTSE 100: Investors celebrate Tesco's plans for US division

Supermarket titan Tesco was a high riser after announcing that it is considering a sale of its loss-making US division, Fresh & Easy, as it revealed that the frontman of the unit, Tim Mason, will leave the company after 30 years' service.

To accompany the group's third-quarter trading statement, in which it revealed a decline in like-for-like (LFL) sales in the domestic UK market, Tesco Chief Executive Officer Philip Clarke said that he would be conducting a strategic review of Fresh & Easy.

Mining peers Vedanta, ENRC, Kazakhmys, Anglo American, Antofagasta, Rio Tinto and BHP Billiton were on the rise in spite of economic figures from China showing that the services sector slowed down in November. While the HSBC China services PMI fell from 53.5 to 52.1 last month, November marked the first simultaneous increase in levels of activity in both the manufacturing and service sectors since July.

Precious metals giant Polymetal also gained after saying it was giving $191m dollars back to shareholders by way of a special dividend.

Global banking giant HSBC was higher after saying that it is to receive $9.39bn from the sale of its 15.57% stake in Chinese insurance giant Ping An Insurance.

Accountancy software group Sage fell after reporting that it had grown revenues slightly over the past year but was keeping a close eye on conditions in Europe, particularly France.

Leading the fallers on the Footsie were Aberdeen Asset Management, SABMiller and Severn Trent after going ex-dividend.

FTSE 250: Petropavlovsk and Stagecoach provide a lift

Petropavlovsk has said that on Tuesday it signed a share purchase agreement for the transfer of 65% of its issued shares in Omchak to Susumanzoloto in four tranches for $21.65m.

Public transport firm Stagecoach was wanted after saying that like-for-like revenue grew 5.9% in the half year to October and revenue growth in the second half is expected to be "relatively modest".

Online gaining firm Bwin.party rose after saying that Jim Ryan, its co-CEO, is to retire from the role in January and return to Canada with his family.

Wealth management firm Brewin Dolphin gained after reporting growth in funds under management after equity markets remained "surprisingly resilient".

Student accommodation group UNITE edged higher after hitting its disposal targets for 2012 after completing the sale of two assets in London and Glasgow.


FTSE 100 - Risers
Vedanta Resources (VED) 1,107.00p +3.85%
Anglo American (AAL) 1,800.50p +3.66%
Eurasian Natural Resources Corp. (ENRC) 279.50p +3.29%
Tesco (TSCO) 336.90p +3.14%
Kazakhmys (KAZ) 736.00p +3.08%
Rio Tinto (RIO) 3,223.50p +2.97%
Evraz (EVR) 239.60p +2.83%
BHP Billiton (BLT) 1,998.50p +2.41%
Polymetal International (POLY) 1,075.00p +2.38%
Antofagasta (ANTO) 1,306.00p +2.11%

FTSE 100 - Fallers
Severn Trent (SVT) 1,590.00p -1.43%
Associated British Foods (ABF) 1,470.00p -1.08%
SABMiller (SAB) 2,797.50p -0.80%
Aberdeen Asset Management (ADN) 335.60p -0.71%
British American Tobacco (BATS) 3,297.50p -0.65%
Land Securities Group (LAND) 811.50p -0.61%
Kingfisher (KGF) 272.70p -0.44%
Standard Life (SL.) 323.50p -0.28%
Sage Group (SGE) 310.40p -0.26%
Imperial Tobacco Group (IMT) 2,529.00p -0.20%

FTSE 250 - Risers
Home Retail Group (HOME) 121.10p +6.88%
Ruspetro (RPO) 86.65p +4.97%
JD Sports Fashion (JD.) 724.50p +4.24%
Ophir Energy (OPHR) 519.00p +3.18%
EnQuest (ENQ) 116.50p +3.10%
NMC Health (NMC) 180.00p +2.86%
New World Resources A Shares (NWR) 273.00p +2.82%
Ocado Group (OCDO) 72.95p +2.75%
Stagecoach Group (SGC) 299.30p +2.64%
Kenmare Resources (KMR) 30.66p +2.34%

FTSE 250 - Fallers
Centamin (DI) (CEY) 55.05p -3.59%
Britvic (BVIC) 391.20p -2.20%
Cranswick (CWK) 769.00p -1.85%
PayPoint (PAY) 845.00p -1.74%
Brown (N.) Group (BWNG) 364.50p -1.70%
Halfords Group (HFD) 333.50p -1.42%
Big Yellow Group (BYG) 341.40p -1.33%
De La Rue (DLAR) 957.50p -1.24%
Shanks Group (SKS) 78.55p -1.20%
Electrocomponents (ECM) 205.30p -1.16%

BC

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