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AstraZeneca, mining stocks pull FTSE 100 higher; Tesco caps gains

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AstraZeneca, mining stocks pull FTSE 100 higher; Tesco caps gains 1

By Devik Jain

(Reuters) -London's FTSE 100 edged higher in choppy trading on Wednesday, helped by gains in heavyweight mining stocks and shares of AstraZeneca, while Tesco slipped to the bottom of the index after reporting a 20% drop in full-year pretax profit.

The blue-chip index rose 0.2%, with commodity trader Glencore Plc adding 2.6% after Goldman Sachs upgraded the stock to "buy" from "neutral".

Other miners also gained as they tracked higher metal prices, while a stronger pound weighed on large dollar-earning companies. [MET/L] [GBP=]

Drugmaker AstraZeneca Plc rose 0.8% after China's health regulator approved Tagrisso, its lung cancer treatment, as adjuvant treatment for patients with early-stage lung cancer.

However, gains were capped by Britain's biggest retailer Tesco, which tumbled 2.7%, as the cost of adapting the business for the pandemic wiped out its "exceptionally strong" sales.

The FTSE 100 has risen 6.5% so far this year as huge vaccine rollouts and government stimulus boosted optimism about a faster economic rebound. But a recent surge in global COVID-19 cases and concerns of higher inflation have put a lid on the gains.

"We see reasons to expect periodic bouts of higher volatility in the near term," chief investment officers at UBS Global Wealth Management said in a note to clients.

"First, investors are likely to be torn between optimism over accelerating growth and worries over higher inflation. Second, optimism over the course of the pandemic is being tested by the spread of new variants of the virus."

The domestically focussed mid-cap FTSE 250 index was unchanged, with defence company Qinetiq Group surging 8.2% to the top of index after forecasting annual results above market expectations.

Among other stocks, Robert Walters shares jumped 8.8% after the recruiting firm forecast upbeat annual profit.

Burberry Group added 1.6% as its French rival LVMH's first-quarter sales bounced back far quicker than expected.

(Reporting by Devik Jain in Bengaluru; Editing by Shailesh Kuber and Uttaresh.V)

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