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London shares open ahead, mining sector up on Vedanta news; NY higher

LONDON (Thomson Financial) - UK blue-chips opened higher, aided by heavy gains on Wall Street overnight, with the mining sector bullish after Vedanta Resources gave an update on its activities projects in India and on rising metal prices.

At 8.07 am, the FTSE 100 index was 39.1 points higher at 6,514.0, after closing 13.5 points firmer at 6,474.9 yesterday, while the FTSE 250 index jumped 41.9 points to 11,376.8.

In the US, Wall Street bounded higher as investors, still mindful of widening credit problems, went in search of bargain stocks, with soaring oil and precious metals prices driving up the companies that produce those commodities.

The Dow Jones Industrial Average rose 117.54, or 0.87 pct, yesterday to close at 13,660.94. However, the size of the gain masked the nervousness seen earlier in the day, when stocks had been lower.

Broader stock indicators also turned higher. The Standard & Poor's 500 index rose 18.10, or 1.20 pct, to 1,520.27, and the Nasdaq composite index rose 30.00, or 1.07 pct, to 2,825.18.

Meanwhile, in Asia this morning, the Japanese Nikkei closed down 152.95 points, or 0.9 pct, at 16,096.68, while Hong Kong's Hang Seng ended the morning up 597.60 points, or 2 pct, at 30,035.73.

In commodity news, oil prices powered past 98 usd in Asian trade Wednesday for the first time as the greenback sank to a new low amid expectations of further declines in US energy reserves.

Earlier, New York's main contract, light sweet crude for December delivery, was 1.16 usd higher at 97.86 a barrel from its closing record of 96.70 in US trades on Tuesday.

Brent North Sea crude for December delivery crossed 94 usd for the first time to a new high of 94.48.

Back in London, Vedanta Resources featured early on, up 56 pence at 2,170, after news its majority-owned Indian unit Sterlite Industries (India) Ltd plans to participate in coal-based thermal power and other ancillary activities projects in India through its unit Sterlite Energy.

The company said these power projects will aggregate to an installed capacity of up to 10,000 MW, to be commissioned over the next five years.

Mining sector peers followed suit, further aided by rising metal prices.

With Kazakhmys up 30 to 1,439, Rio Tinto 89 higher at 4,423 and Anglo American adding 63 to 3,215.

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