Leading shares closed higher on Wednesday in cautious trading as market players digested the latest batch of company results and awaited key US economic data later this week.

The benchmark FTSE 100 index added 0.68 percent to close at 5,640.57 points.

Markets were waiting for US figures on trade and weekly jobless claims that are scheduled to be released on Thursday.

Investors also continued to focus on Greece and the risk that its public debt problems might spread to Portugal and other European nations.

Traders also absorbed an official announcement that the government will unveil its annual budget on March 24, a step widely taken to mean the country will go to the polls in early May.

Lloyds Banking Group (LBG) was the most traded stock, seeing 244 million units change hands, followed by Royal Bank of Scotland (RBS), which saw 115 million shares switch owners.

The day's top performer was independent broker ICap, which added 15.8 pence -- or 4.46 percent -- to finish at 370.4, followed by oil industry services provider Petrofac, which added 47 pence -- or 4.22 percent -- to stand at 1,162.

British American Tobacco was the biggest faller, dropping 71.5 pence -- or 3.1 percent -- to close at 2,235, followed by asset management group Schroders which shed 31 pence -- or 2.68 percent -- to finish at 1,127.

Meanwhile, sterling ended almost flat against the dollar while it slipped marginally against the euro.

At 17:20, the pound was trading at 1.4990 dollars, a touch up from 1.4985 at the same time on Tuesday, while Britain's currency stood at 1.0961 euros, down from 1.1038 over the same period.