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Banks, commods pull FTSE higher after UK, US data

Published 11/24/2010, 12:38 PM
Updated 11/24/2010, 12:40 PM
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* FTSE 100 up 1.4 percent; hit 7-wk low earlier in session

* Banks, commods rebound after sharp falls earlier this week

* Compass top blue-chip riser on div hike, upbeat outlook

By Tricia Wright

LONDON, Nov 24 (Reuters) - Britain's top share index closed higher on Wednesday, boosted by commodity stocks and banks which bounced back after hefty falls earlier in the week, as investors welcomed economic data from both the UK and the United States.

The FTSE 100 ended up 75.82 points, or 1.4 percent, at 5,657.10, having hit a seven-week low earlier in the session.

Energy stocks were in demand, following crude prices higher after a U.S. government report showing crude oil stockpiles rose against expectations last week, but by less than reported by industry.

It was a similar story with mining stocks, with Antofagasta , Xstrata and Kazakhmys near the top of the blue-chip leader board -- up 4.3 percent and 4.2 percent respectively -- boosted by rising metals prices.

"I think (the market's) being helped by the GDP numbers for the UK coming in flat ... and also U.S. figures, they came in well, certainly the initial jobless claims," Manoj Ladwa, senior trader at ETX Capital, said.

"But we're going into a U.S. holiday for Thanksgiving tomorrow and volumes are relatively light ... so we could give back some of these gains tomorrow," he said.

Britain's economy grew 0.8 percent in the third quarter of this year, official data confirmed, while U.S. jobless claims fell more than expected, the government reported.

BANKS BOUNCE

Risk-sensitive banks staged a recovery, with Standard Chartered the best off, adding 1.9 percent.

Traders said investor sentiment was helped as worries eased over tensions in the Korean peninsula.

North Korea shelled a South Korean island on Tuesday in one of the most serious incidents on the peninsula since the Korean War ended in 1953.

The U.S. State Department said on Wednesday it believed the artillery attack was an isolated action and not part of a wider campaign by Pyongyang.

Among individual movers, Compass Group grabbed the top spot among FTSE 100 gainers, putting on 7.3 percent, after the contract caterer beat profit forecasts and raised its dividend by a third.

Positive broker sentiment helped testing equipment firm Intertek and outsourcer Capita Group, up 5.5 percent and 3.1 percent respectively, with Goldman Sachs adding both to its "conviction buy" list in a sector review.

Johnson Matthey added 2 percent after forecast-beating results from the platinum refiner.

Autonomy was the sharpest faller, off 5.9 percent, after the software firm said it has been working on an acquisition over the past few months.

Capital Shopping Centres was also on the back foot, down 5.1 percent after confirming it is in talks to buy the Trafford shopping centre in Manchester for 1.6 billion pounds ($2.5 billion) in a deal that would make the seller, Peel Group, its biggest shareholder. (Editing by David Holmes)

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