The FTSE 100 is now 7 percent above its pre-Brexit level, helped by a fall in sterling. The FTSE 250 has also recovered, up 2.3 percent since Britain's June 23 vote to leave the European Union. "The market seems to be relatively buoyant and that's not really surprising given that interest rates are so low. There's not many other options in terms of where money is going to flow other than the stock market, given the historic low yields on bonds and cash not really producing very much," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
But commodity-related stocks came under pressure Wednesday. Energy stocks were the biggest weight on the FTSE 100, trimming 15.8 points off the index. The sector extended falls after US data revealed a large build in crude supplies. Mining companies also slid as metals prices dropped. Randgold Resources, Fresnillo, BHP Billiton, Anglo American and Rio Tinto dropped between 2.1 and 5 percent.
However, banking stocks Barclays HSBC Holdings and Lloyds Banking Group all rose 0.8 percent to 1.8 percent after a series of encouraging reports on the British economy, with the boss of Deutsche Bank also calling for more M&A within the sector. The latest showed British consumer morale in August recovered somewhat from the slump that followed the Brexit vote. Another, from mortgage lender Nationwide, said house price rises picked up speed more than expected in August. Outside the blue chips, Restaurant Group dropped 5.9 percent after Citigroup cut its rating on the stock to "sell". "Restaurant Group's share price has bounced over 50 percent of late. Given this significant move, and the view that the group faces ongoing operational headwinds, we once again downgrade the stock recommendation to Sell," Christopher J McVey, an analyst at Citigroup, said in a note.