By Sarah Turner

LONDON (Dow Jones)--Miners led a fresh rally in U.K. stocks on Wednesday, with Rio Tinto advancing after an upbeat production report.

But the gains were broad-based after healthy earnings from the likes of Intel, J.P. Morgan Chase and BASF.

Overall, the U.K. FTSE 100 index rose 2%, or nearly 102 points, to 5,256.10. Across the London market, gainers outnumbered decliners by a 2-to-1 margin.

Anglo-Australian mining giant Rio Tinto (RTP) rose 5.3% after the firm said its iron-ore output in the September-ended quarter rose 12% from a year earlier, a record for the period, as mines worked at full steam to meet strong global demand.

Rio Tinto said output at its iron-ore mines in the Pilbara region of Western Australia rose 18% during the quarter, compared with a year ago.

Of other metals, copper output was up 24% in the quarter, output of hard-coking coal declined 5% and thermal-coal output rose 12%. Bauxite output fell 16% and aluminum declined 4%.

Analyst reaction to the figures was broadly positive. Barclays Wealth analysts called the statement "strong" and Evolution Securities analysts said that Rio Tinto's third-quarter production numbers reflect the strength of iron-ore demand in China.

The Evolution analysts added "while cautiously positive, the outturn will depend on the trajectory of interest rates and other stimuli."

Other miners advancing included Kazakhmys , up 9.4%, and Xstrata , up 7.7%.

The sector gains came as most metals futures rose as the dollar weakened against most major currencies on Wednesday, including sterling.

On the U.K. economic front Wednesday, data showed that the number of British workers claiming jobless benefits in September posted the smallest rise since May 2008. That's a sign that the deterioration of the labor market is beginning to slow, economists said.

The rise, however, still brought the total number of persons claiming benefits to 1.63 million, a 12-year high, equal to 5% of the workforce.

Consumers have been cautious amid higher unemployment. Alcoholic-drinks maker Diageo (DEO) commented on consumer spending trends on Wednesday saying "consumer trends across our markets remain broadly unchanged since the year-end. Therefore net sales in the first quarter of the new financial year have been weak."

Diageo shares fell 2.1% on Wednesday after it said sales in the first quarter ended Sept. 30 fell 6% on an organic basis, a bigger drop than a 3% to 4% decline forecast by analysts.

The group stuck to its guidance for low-single-digit organic operating-profit growth in fiscal 2010.

Outside the top index, shares of Punch Taverns fell 16.6% after the pub operator reported its net loss for the year ended Aug. 22 widened to 176.4 million pounds ($280.4 million) from 64.7 million pounds. The latest figure reflected one-off charges including a 663 million pound impairment charge on its pub estate.

Revenue for the year fell 7.7% to 1.44 billion pounds and pretax profit before one-off charges dropped 39% to 160.4 million pounds, in line with expectations.

"The rumored hit to asset values is confirmed with a 663 million pound impairment charge to pub assets, in line with estimates recently quoted in the press. This brings net asset value per share to 260 pence as reported by the company today," said analysts at Seymour Pierce.

Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274