FTSE gains 0.9 pct as U.S. data lifts miners, banks

Banks and commodity issues bounced back after weakness in the previous session, lifting Britain's top share index 0.9 percent early on Friday as economic recovery hopes were boosted by strong U.S. retail data.

By 0759 GMT, the FTSE 100 was up 50.88 points at 5,763.88, recovering all of Thursday's losses when it ended 49.36 points, or 0.9 percent, lower.

Thursday's fall was the steepest one-day percentage decline in six weeks and the index ended at its lowest closing level since March 31.

U.S. stocks moved higher on Thursday after top U.S. retail chains posted a record rise in monthly same-store sales for March, helped by an early Easter holiday and an improving job market, in the strongest sign yet of revived consumer demand.

This data brightened the demand outlook picture, helping lift metal prices and miners. Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and BHP Billiton added 1.4 to 1.8 percent. 

"After the U.S. data the market seems to have momentum behind it and the economy is benefiting from the current levels of interest rates" said Graham Secker, equity strategist at Morgan Stanley.

"The market seems to be taking solace in the fact the economy is recovering quite nicely."

The UK blue-chip index is up 6.6 percent so far this year after it gained 22 percent in 2009.

Energy firms also benefited from improved sentiment which helped crude prices CLc1 recover to over $86 a barrel.

BG Group, BP, Royal Dutch Shell, Tullow Oil and Cairn Energy gained 1.0 to 1.9 percent.

BANKS BUOYED

Banks, which tend to benefit as the economic outlook improves, were also a strong source of support for the index.

Barclays, HSBC, Standard Chartered, Royal Bank of Scotland and Lloyds Banking Group added 0.3 to 1.8 percent. 

British wholesale inflation numbers will be the main macro focus on Friday, with March PPI input seen up 1.4 percent on themonth, after a 0.1 percent rise in February, and PPI output is seen up 0.4 percent month-on-month, following a 0.3 percent gain in the previous month.

Output prices are expected to rise at their fastest in overa year, in part due to unfavourable base effects from a sharpfall in oil and commodity prices early last year, as well as manufacturers passing on higher input costs.

The only U.S. data of interest in the afternoon will be February wholesale inventories.

Pharmaceuticals stocks were the only significant drag on the index as investors shunned the defensive sector as their appetite for risk improved.

Astra Zeneca and Shire fell 0.3 and 0.1 percent respectively.