UK's benchmark FTSE 100 index ticked higher on Tuesday on gains in energy and consumer staples stocks, while markets remained cagey in a week dominated by central bank meetings including those of the Bank of England and the U.S. Federal Reserve.
The commodity-heavy FTSE 100 (.FTSE) advanced 0.2% at 0809 GMT after a holiday to mark Queen Elizabeth's funeral, supported by a more than 1% jump in oil majors BP (BP.L) and Shell (SHEL.L).
Market sentiment, however, remained cautious ahead of the Fed's two-day policy meeting starting Tuesday, as traders positioned themselves for a rapidly rising interest rate environment in the world's largest economy.
The Bank of England's policy decision is also due this week, with traders seeing a 75% likelihood of a 75 basis point hike. The meeting had been pushed back to Sept. 22 from Sept. 15 due to the national mourning following the death of Queen Elizabeth.
Consumer staples stocks such as Diageo (DGE.L) and British American Tobacco (BATS.L) rose about 1.5% each on the internationally focussed FTSE 100.
"The move today on the FTSE 100 shows just how sensitive the index is to the economy in China," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
"This lifting of COVID restrictions appears to have given those stocks which are highly reliant on buoyant consumer spending in China, like Diageo, a bit of a lift."
The domestically focussed FTSE 250 index (.FTMC) fell 0.9%, underperforming its blue-chip peer, as real estate (.FTNMX351020) and retail (.FTNMX404010) stocks declined more than 2% each.
Weighing on the mid-cap index, Moonpig Group Plc (MOONM.L) dropped 9.7% as the online greeting card and gifting platform reiterated its full-year outlook, while home improvement retailer Kingfisher (KGF.L) slid 5.3% on reporting a 29.5% fall in first-half underlying profit.
Frasers Group (FRAS.L) fell 2.3% after the sportswear retail group said Mike Ashley is set to step down as director this year.
