FTSE gains as world markets rally

But Europe's biggest electricals retailer DSG International Plc dropped 4.9 percent after a trading update highlighted weak margins despite a 5 percent rise in first half like for like sales.

Shares that went ex dividend also weighed on the index, taking 10.1 points off the FTSE 100, and included HSBC, Next, Sainsbury Scottish Power and Vodafone.

Drug maker AstraZeneca lost 0.8 percent after saying it expected 2006 earnings per share to be at the lower end of its $3.85 to $3.95 forecast range following the launch of a copycat version of its heart drug Toprol XL on Tuesday.

The Anglo Swedish drugmaker also said it had signed an agreement for Par Pharmaceuticals to distribute an authorised generic version of Toprol XL in the United States.