(Reuters) - A rally by commodity stocks and strength in financial issues drove Britain's leading share index sharply higher on Tuesday, as investors risk appetite returned on increasing hopes that European leaders will take purposeful action to alleviate the region's debt crisis. European Central Bank policymakers said on Monday officials were working to boost the firepower of the region's rescue fund to try and alleviate a crisis that U.S. President Barack Obama said "is scaring the world." At 11:57 a.m., the FTSE 100 index was up 133.65 points, or 2.6 percent at 5,223.02, having bounced from a session lows of 5,089.37, extending Monday's 0.5 percent advance as the final week of September and the third-quarter draws to an end positively after a turbulent month. "This 'whippy' behaviour suggests that investors remain unconvinced that the bottom is in place (although this morning's advance should help to settle nerves somewhat). Nevertheless, a snap rally could conceivably lift the UK index up to around 5,330 in the short-term," said Bill McNamara, technical analyst at Charles Stanley in a note. Specialty Miners & Metals provided the biggest prop for the blue chips, having been big fallers on Monday, led by Antofagasta up 7.6 percent, as copper rebounded from a 14-month low hit in the previous session. "Miners have felt the pressure in recent weeks with a double whammy of a market collapse and worries about falling global demand. Today's rally is an impressive one, but it is hard to see today's mining sector strength as anything but a dead cat bounce while economies continue to struggle," said David Jones, Chief Market Strategist at IG Index. Precious metals miners also rebounded as gold rallied, with Fresnillo adding 6.6 percent, aided by a Citigroup upgrade to "hold" on valuation grounds. Integrated oils lent their strength to the blue chips as well with crude prices over 2.5 percent higher, with BP and BG Group leading the way, up 3.9 percent and 4.2 percent respectively. And banking stocks, possibly the most sensitive to the twists and turns of the euro zone debt story extended Monday's gains, led by Royal Bank of Scotland and Barclays, up 5.5 percent and 5.0 percent respectively. WEIR WANTED Among individual FTSE 100 gainers, engineer Weir Group added 5.3 percent as Goldman Sachs reiterated its "Conviction Buy list" rating on the stock, which was the worst performing in its Capital Goods universe last week. "Our 12-month target price of 3,250 pence is based on 14.0 times 2012E EV/EBIT, reflecting Weir's top-quartile industry positioning, attractive growth and end markets, top-quartile cash returns (CROCI) and potential M&A appeal," Goldman said in a note. Bullish broker comment also lifted luxury goods group Burberry up 3.7 percent with Credit Suisse repeating its "outperform" rating after a meeting with management. U.S. stock index futures,,, all pointed to early gains on Wall Street, extending Monday's rally with investors looking to a big batch of data for direction. The Fed Midwest Manufacturing Index for August, the S&P Case/Shiller Home Price Index for July, September U.S. consumer confidence, as well as the Federal Reserve Bank of Richmond's September indexes on area manufacturing and service sectors are all due for release on Tuesday.

Source