MILAN/LONDON (Reuters) - Gains among mining stocks on stronger metal prices helped British shares outperform a sluggish European equity market on Wednesday, while packaging firm RPC sold off sharply after updating investors on its spending plans.
The commodity-heavy FTSE 100 index rose 0.3 percent and mid caps climbed 0.6 percent. The pan-European STOXX 600 index ended flat.
Miners provided the biggest uplift to the FTSE as base metal prices rose, with copper and lead gaining ground on prospects of a supply squeeze.
Anglo American, Rio Tinto and Antofagasta all rose more than 3 percent, while BHP Billiton gained 2.5 percent on reports the Anglo-Australian miner had received first bids for its U.S. shale business.
Among mid-caps, RPC tumbled 11.9 percent after the plastic packager announced an increase in investments to take advantage of strong demand in China.
Analysts said the investment plans had dented the firm’s cash flow figures.
“RPC saw organic growth, although in the face of rising prices and a currency tailwind we think free cash flow looks low,” said Paul Moran, head of research for Northern Trust Capital Markets.
WH Smith was a standout gainer, up 7.5 percent, following a well-received update.
“High Street total sales and LFL ... is a great performance in the context of a very challenging environment and will surprise” said Investec analysts.
Smurfit Kappa , Europe’s biggest packager, began the day at the top of the FTSE as investors warmed to its prospects after U.S. rival International Paper dropped plans to make an offer for the Ireland-based group.
The stock pared gains to end the session up just 0.5 percent, however.
“The fundamentals of the European packaging sector are in excellent shape,” Davy analyst Barry Dixon said in a note, upgrading his earnings forecasts and price target for the stock.
“Smurfit is the leading player in this market and therefore the most exposed to the positive dynamics. This, combined with the deep intrinsic value of its assets, points to significant hidden value and upside in the share,” he added.
Consumer staples were a weak spot with British American Tobacco, Imperial Brands and Unilever down 1 to 1.8 percent as the dollar fell.
Insurance stocks across Europe and the UK also fell following a report that U.S. Internet giant Amazon was considering extending its empire to offer home insurance.
Direct Line and Aviva dropped on the report, but recovered to trade only slightly lower by the end of the session.
Reporting by Danilo Masoni; Editing by Andrew Heavens and John Stonestreet