UK stocks edge higher as oil retreats; Fed verdict in focus

Sept. 16 (Reuters) - London shares inched higher on Wednesday as oil retreated, while traders awaited the key U.S. Federal Reserve decision on interest rate hikes due later this day.

The blue-chip FTSE 100 index .FTSE rose 0.34% to 10,692.21 points by 0926 GMT, while the midcap FTSE 250 .FTMC climbed 0.46%.

"Near term, AI and oil jitters may help FTSE100, and while domestic macro is tricky, valuations offer cushion," Barclays analysts said in a note as the index is up 7.6% this year, in line with the STOXX, even after a recent pull-back as bond yields and oil prices surged.

($1 = 0.7425 pounds)

• Oil prices retreated after a two-day rally after reports of additional Saudi crude cargoes via Oman eased Middle East supply concerns. O/R
• Homebuilders .FTNMX402020 rallied 4.4%, led by Barratt Redrow BTRW.L, which gained 8.8%, after reporting stronger reservation rates, a robust order book and profit above forecasts.
• Rate-sensitive heavyweight banks .FTNMX301010 gained 1.6% with HSBC HSBA.L rising 1.3% and Standard Chartered adding 2.2%.