By Sarah Turner

LONDON (Dow Jones)-- British shares advanced on Wednesday, with investors buying up sectors that are closely tied to economic growth such as miners and banks.

Investors appeared to ignore worries that higher interest rates could choke off growth to the backburner, as the Organization for Economic Cooperation and Development revised higher its growth forecasts for the first time in two years.

Meanwhile, better orders for airplanes and machinery translated into a stronger-than-expected 1.8% increase in U.S. durable-goods orders in May, government data indicated.

Among miners, shares of Vedanta Resources advanced 3.2% and Rio Tinto (RTP) climbed 5.6%. Banks on the move included Barclays (BCS), up 4.5%, and Standard Chartered , up 5.3%.

A decision on U.S. interest rates from the Federal Reserve is due to be announed after the European close. The Fed is widely expected to leave monetary policy on hold.

"Ahead of today's FOMC meeting, global equities bounced in anticipation that the Fed will signal that interest rates will remain low for an extended period of time," said analysts at RBC Capital Markets.

London's FTSE 100 index closed up 1.2% at 4,279.98. Shares in the rest of Europe rose, as did U.S. stocks in early trading.

Brokers split on Land Securities

Shares in Wednesday's trading focus included commercial property developer Land Securities , up 1%.

Land Securities was downgraded to in-line at Cazenove, with the broker saying the shares look fair value at present, but got upgraded to neutral from underperform at Credit Suisse after the broker adjusted its profit and net-asset-value estimates.

Credit Suisse also upgraded the U.K. commercial property sector to overweight from benchmark, citing U.K. economic momentum, an inexpensive British pound against the euro, and property's value as an inflation hedge.

British Land , up 1.3%, is the broker's key outperform stock.

At the same time, Credit Suisse cut its rating on the U.K. retail sector to 20% underweight from a previous underweight position of 10%, noting that it's the only sector to have outperformed prior to and since the market low in March.

"This is very unusual and typically shows that the sector has moved too far," the broker said. Shares of home-improvement retailer Kingfisher fell 1.5%.

In adddition, the Confederation of British Industry said in its monthly distributive trades survey that British retailers saw a second consecutive month of falling retail sales volumes in June.

Also on the move, shares of Man Group fell 4.1% to 275 pence. Morgan Stanley started placing 12 million shares priced between 267 pence and 272 pence each, Dow Jones Newswires reported, citing traders.

Stagecoach, Inchcape advance

Outside London's top index, shares of Stagecoach rose 8.5% following financial results.

The bus and rail company said that, while net profit for fiscal 2009 fell 46% to 133.5 million pounds ($219.6 million), the prior year's profit included a tax benefit and gains from discontinued operations.

Pretax profit rose 2% to 170.8 million pounds, while revenue climbed 19% to 2.1 billion pounds, as both bus and rail operations generated revenue growth, Stagecoach said.

Meanwhile, shares of U.K. car dealer Inchcape shot up 15.4%.

Second-quarter pretax profit is expected to be significantly ahead of the 20 million pounds reported in the first quarter, Inchcape said, though this would still well below the year-earlier figure.

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