* Weak dollar underpins commodity gains
* Liberty leads property stocks lower after share placing * British data mixed but investors await Fed decision
By David Brett
LONDON, Sept 23 (Reuters) - Britain's top share index was up 0.3 percent by midday on Wednesday, lifted by defensive and commodity stocks as investor optimism on the economic outlook persisted.
But moves were muted as investors await a rate decision from the U.S. Federal Reserve due later.
By 1059 GMT the FTSE 100 <.FTSE> was up 15.84 points at 5158.44, having closed up 0.3 percent on Tuesday when it set a fresh 2009 intraday peak at 5,189.88.
"Given the speed of the economic recovery coming through we would still advise investors to position their portfolios towards the cyclical side of the market... including industrials and technology... as opposed to classically defensive stocks," said Henk Potts, equity strategist at Barclays Stockbrokers.
However, defensively viewed equities joined a broad-based,
if slight, rally as pharmaceuticals GlaxoSmithKline
Dollar weakness has provided support for metal and oil prices, which has proved the catalyst for the rise in commodity issues.
Among miners, Rio Tinto
As risk appetite spread, oils joined the rally. BP
BURBERRY GAINS
Individual risers included Burberry
Banks also benefited. HSBC
Bank of England policymakers voted unanimously to keep their asset purchase programme at 175 billion pounds in September, but those who had voted for more in August still thought they had a case, minutes of their meeting showed.
The number of mortgages approved for house purchase in August jumped 81.4 percent year-on-year to 38,095, according to the British Bankers' Association.
Britain has probably come out of recession but the pace of recovery in 2010 will be slow, with tight credit and weak domestic demand posing obstacles to an upturn, the Confederation of British Industry said. [ID:nLM276834]
On the downside, shopping mall owner Liberty International
Other property companies were also on the back foot as the
Liberty move highlighted funding concerns in the sector.
Hammerson
Four FTSE 100 companies traded ex-dividend on Wednesday,
with Aviva
After the London close, attention will turn to the outcome of the latest two-day Federal Reserve Open Market Committee meeting, although no change is expected to U.S. monetary policy.
Ahead of that, investors will watch the latest U.S. mortgage and refinancing indexes to get further evidence on the state of the world's largest economy. (Editing by Dan Lalor)