By Simon Falush
LONDON, Nov 23 (Reuters) - Buoyant commodity prices lifted
miners and energy stocks, while improved risk appetite also
boosted banks, pushing Britain's top share index 1.7 percent
higher in a broad rally early on Monday.
The blue chip index was 88.75 points higher at 5,340.16 by
0905 GMT after it closed 0.3 percent lower on Friday and fell in
the previous three sessions.
Miners led the rally as gold powered to a record above
$1,160 an ounce on Monday, lifted by a retreating dollar, which
also promoted a sharp rise in copper prices.
Rio Tinto, Xstrata, Lonmin, Anglo
American, Kazakhmys and Fresnillo added
3.6-4.8 percent.
"We're seeing a couple of days of weakness being reversed
and there may be a bit of bargain hunting as those who missed
the rally since March look to get into equities," said Richard
Hunter, head of equities at Hargreaves Lansdown.
The FTSE 100 is up 20.5 percent this year, and has soared
more than 50 percent since touching a six year trough in March.
Energy stocks were boosted as crude also benefited from the
weaker dollar. BG Group, BP and Royal Dutch Shell gained 1.2-1.5 percent.
Mid-cap explorer Heritage Oil added 2.7 percent
after it said it had agreed to sell its Ugandan interests to
Italy's Eni for up to $1.5 billion.
Banks, which tend to be beneficiaries of increasing risk
appetite, also rose markedly.
Barclays, HSBC, Standard Chartered and Royal Bank of Scotland added 2.4-3.1
percent.
Lloyds Banking Group added 2.5 percent after it
said it had agreed to swap 8.78 billion pounds (14.5 billion) of
bonds as part of a deal aimed at funding its exit from a costly
state-backed insurance scheme for bad debts.
Utilities Severn Trent and United Utilities
were rare stocks in negative territory, down 0.1 and 0.3 percent
respectively, with investors nervous ahead of a ruling from
water regulator Ofwat that is expected to enforce price cuts.
But other defensive stocks joined the broad market rally
with pharmaceuticals large caps GlaxoSmithKline,
AstraZeneca and Shire adding 0.5-1.3 percent.
In the absence of UK data on Monday, investors' attention
will be drawn across the Atlantic, with U.S. existing home sales
data for October scheduled for release.
According to a Reuters poll of 29 economists, sales of
previously owned homes are expected to climb to a seasonally
adjusted annual rate of 5.70 million, the fastest pace since
5.73 million units were sold in July 2007 and up from 5.57
million units in September.
British opposition leader David Cameron and a senior
government figure are expected to outline their economic plans
at the CBI conference in London on Monday.
Pascal Lamy, director general of the World Trade
Organisation, told the Sunday Telegraph that the British
government could face trade sanctions if it is found guilty of
protectionism as a result of the bank bail out.
(Reporting by Simon Falush, editing by Nigel Stephenson)
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(simon.falush@reuters.com. +44 20 7542 7681) Reuters Messaging: simon.falush.reuters.com@reuters.net)
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