MARKETS-BRITAIN

MAY 8 2009 11:46h

FTSE Up 1.5 Pct, Led by Banks, Commodities

FTSE

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By 0743 GMT the FTSE 100 was up 64.86 points, or 1.5 percent at 4,463.54, after rising 2.19 points on Thursday.

Britain's leading shares were up 1.5 percent at midday on Friday, fuelled by gains from oil stocks, tracking firmer crude prices, and by strength from banks in the wake of the U.S. stress tests.

By 1044 GMT the FTSE 100 was up 66.25 points higher at 4,464.93, after closing up 2.19 points at 4,4398.68 on Thursday. The blue-chip index is up 5 percent this week, and enjoyed its best monthly run in six years in April.

"We've seen a pretty amazing week on the FTSE and it looks like it's set to continue," said Mark Priest, senior equities trader at ETX Capital. "It looks like sentiment is on the upside."

Oil stocks added the most points to the index, gaining ground with crude prices rising to almost $58 per barrel. Heavyweights BP, Royal Dutch Shell and BG Group added between 1.9 and 2.2 percent.

Against a background of firmer metal prices, miners also rose, with Kazakhmys, Anglo American, Vedanta Resources, Xstrata , BHP Billiton, and Fresnillo adding between 1.7 and 5.1 percent.

British factory gate inflation eased to its lowest in five years last month but was still stronger than expected, while input prices fell at their fastest annual rate in nearly 7 years, official data showed on Friday.

U.S. stocks fell the previous session but index futures rose after the official government results were released as U.S. regulators told leading banks to raise $74.6 billion to build a capital cushion officials hope will restore faith in financial firms.

UK banks (where stress tests have already been conducted by the local regulator) were higher. Lloyds Banking Group, HSBC and Standard Chartered put on between 1.4 and 5 percent.

Royal Bank of Scotland surged almost 14 percent, topping the blue-chip leaderboard, after the part-nationalised lender issued a trading update which traders said contained no negative surprises.

RBS fell to a small first-quarter loss after bad debts quadrupled and it took another 2.1 billion pound ($3.2 billion) writedown on risky assets.

PAYROLLS EYED

U.S. non-farm payrolls for April, due out at 1230 GMT, would give further clues as to whether the pace of economic decline is slowing.

Economists polled by Reuters expected a median 590,000 jobs were lost in the United States in April compared with a loss of 663,000 in the previous month.

Among other individual movers, Inmarsat added 6.3 percent after the satellite communications company said it was confident of meeting its full-year revenue growth target after first-quarter sales rose 10.5 percent.

Private equity group 3i jumped 14.2 percent. The FTSE 250-listed company launched a 732-million-pound rights issue and said it would use the money to pay down debt and bolster its balance sheet.

Elsewhere on the second tier, Taylor Wimpey gained 9.9 percent after the beleaguered housebuilder said it would turn to shareholders for 533 million pounds ($799.6 million) in a fully underwritten placing and open offer, to reduce its debt pile.