London blue-chips built modestly on gains on Tuesday as the falling pound raised the prospect of a UK interest rate cut.
The FTSE 100 Index rose 13.10 points to 6723.23 as the pound descended 0.07% against the dollar to US$1.3131, making UK exports cheaper.
The UK-centric FTSE 250 also brushed off a loss of nearly 50 points to stand 5.1 points ahead at 17096.08.
Alexandra Russell-Oliver at Caxton FX noted that Bank of England monetary policy committee member Martin Weale said he was more likely to vote for stimulus after last Friday's dire manufacturing PMI data.
"Those likely to vote for stimulus next week include Vlieghe, Haldane and Weale, while Governor Carney has previously said that in his view stimulus this summer would likely be appropriate," Russell-Oliver said.
The price of a barrel of Brent crude fell 0.95% to US$44.30 while West Texas Intermediate (WTI) dropped 1.3% to US$42.56 a barrel.
London Capital Group said oil slipped below its 100-day moving average on the downside for the first time since April and short positions were gaining further momentum for a fresh attempt towards the US$40 level.
LCG analyst Ipek Ozkardeskaya said: "Investors see increasing value in the pound’s depreciation, as UK companies become gradually more cost efficient and could be interesting M&A targets for foreign investors."
In small-caps, Sunrise Resources Plc (LON:SRES) brightened 13.5% to 0.21p as it found significant bedrock copper-gold mineralisation in trenching at its Garfield Project in Nevada in the US.
Baron Oil PLC (LON:BOIL) spurted 37.5% to 0.55p on news that Peru had signed a supreme decree to assign a 30% interest in block Z-34 from Baron's subsidiary Gold Oil Peru SAC to Union Oil and Gas Group under the terms of a farm-in agreement of April 29, 2013.
Baron's chairman Bill Colvin said: "The eventual assignment will unblock the path to new activity on Z-34, as well as providing a cash injection to Baron."
Public sector e-commerce system provider Cloudbuy PLC (LON:CBUY) was also up about 16.4% to 8p after rising 47% on Monday, although a lack of news from the company left investors none the wiser.
Bluebird Merchant Ventures Limited (LON:BMV) ticked up 29.4% to 2.75p as the Philippine focused copper concentrate company updated on metallurgical tests and operational progress.
Meanwhile, Harvest Minerals Limited (LON:HMI) backtracked 9.3% to 4.88p as investors were seemingly unimpressed by a resource estimate from its Arapuá fertiliser project in Minas Gerais state, Brazil.
Investors appeared similarly underwhelmed by China New Energy Ltd's (LON:CNEL) signing of an investment promotional and protection agreement between Sunbird Bioenergy Africa Limited and the Zambian government.
Shares fell 8.7% to 1.58p as the bioenergy engineering group said there were a number of other project milestones to be concluded before it could do a deal with Sunbird to begin building the Zambian project.
The Footsie top riser was Provident Financial PLC (LON:PFG) after reporting higher first-half profits. Shares rose 4.9% to 2727p.
BP Plc (LON:BP.) was among the biggest losers, down 2.4% to 429.9p, as it psted a US$2.2bn loss in the second quarter of 2016, thanks largely to a US$5.2bn charge for the 2010 Gulf of Mexico oil spill.