Oils, miners, banks pull FTSE up 1.5 pct

 

Britain's leading share index ended 1.5 percent higher on Friday, recovering some of the week's sharp falls as heavyweight oils, miners, and banks returned to favour, with a measure of risk appetite returning.

At the close, the FTSE 100 .FTSE index was up 65.07 points at 4,345.93 points, posting its biggest daily percentage gain since June 1.

But the index was still almost 100 points below last Friday's close following a slide at the start of the week which erased around six weeks of gains.

'Triple witching' index futures, index options and stock options expiries added some volatility in the morning session.

"The FTSE has re-taken the 4,300 level ... (and) ... that could be taken as a reassuring message that although the rally of the last three months may be running out of steam, support like this suggests that it certainly wasn't overdone" said Jimmy Yates, head of equities at CMC Markets.

"Sustaining gains through the quiet summer months will likely be another separate challenge markets need to address ... but to be finishing this week with a rising - rather than falling - market may again be reason to add a little more confidence to the equation" Yates added.

Energy stocks found the most support as oil prices stayed above $71 a barrel. BP added 2.5 percent, BG Group jumped 4 percent and Royal Dutch Shell gained 2.1 percent.

Miners recovered after recent falls, with Lonmin , BHP Billiton BHP.L, Anglo American , and Rio Tinto RIO.T up 2.0 to 5.6 percent as metals prices turned positive. 

Xstrata , buoyed on Thursday by a pair of broker upgrades, gained 4.1 percent after the Financial Times quoted an unnamed banker as saying commodity trader Glencore, which owns over a third of the miner, was in talks with bankers about a flotation.

Banks were in positive territory as a sector but mixed overall with Barclays , Standard Chartered , Lloyds Banking Group adding between 1.0 and 2.0 percent, but Royal Bank of Scotland and HSBC lost 2.1 and 0.3 percent, respectively.

Lloyds Banking shares were being re-weighted for Monday to account for its recent capital raising.

Life insurers saw good support helped by a bullish Deutsche Bank note on the sector, with the broker raising target prices across the board. Aviva , Standard Life , Prudential , and Friends Provident added 3.2-4.8 percent.

U.S. SHOOTS STILL GROWING

U.S. stocks .DJ1 were higher on Friday, extending Thursday's rally which came after upbeat U.S. manufacturing and jobs data revived hopes of a global economic recovery.

But with "triple-witching" expiries throughout the session in New York volatility looked guaranteed, according to traders.

In a sign the British housing market could be slowly recovering, housebuilder Taylor Wimpey said it had seen stability in the past six weeks, and it might increase the number of new sites during the second half.

Taylor Wimpey shares gained 9.7 percent, while peers Barratt Developments , Bovis Homes , Bellway , and Redrow added 1.4-7.0 percent. 

Drugmakers were on the up, buoyed by strength in AstraZeneca , which rose 1.6 percent as UBS added the stock to its "First XI" list citing drug pipeline opportunities.

Among the minority blue-chip fallers on Friday, some defensive issues saw their recent attractiveness fade, with mobile telecoms heavyweight Vodafone losing 1.5 percent, while medical products firm Smith & Nephew shed 1.2 percent, and BT Group slipped 0.3 percent.

Lloyd's insurer AmlinL> fell 1.4 percent ahead of its demotion back to the FTSE 250 index from Monday.