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FTSE pushes higher as banks, commodity stocks rise

Published 04/21/2011, 07:08 AM
Updated 04/21/2011, 07:12 AM
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* FTSE 100 index gains 0.2 percent in moderate volumes

* Banks up, led by Barclays ahead of results

* Vodafone weak on read-across from Dutch peer KPN's results

LONDON, April 21 (Reuters) - Strength in banks and commodity stocks lifted Britain's top share index on Thursday, consolidating a recent rally ahead of the long holiday weekend.

At 1052 GMT, the FTSE 100 index was up 13.97 points, or 0.2 percent, at 6,036.23, having jumped 2.1 percent on Wednesday to close back above the 6,000 level for the first time since the start of March.

Midsession volumes, however, were moderate at just over 30 percent of the 90-day moving average.

"With four bank holidays coming in the next seven work days, one can expect volumes to remain thin in the near term, and this may cloud true market sentiment somewhat," said Giles Watts, head of equities at City Index.

Banks provided the main strength for the FTSE 100 index, led by Barclays, up 2.1 percent as investors looked ahead to the lender's first-quarter results due next week, and with earnings scheduled from U.S. peer Morgan Stanley.

Gains by miners also provided the blue-chip index with fuel as metal prices moved higher, mainly thanks to a weaker dollar, with Eurasian Natural Resources up 2.3 percent.

And energy issues moved higher as crude prices rose, with BG Group up 0.8 percent, and BP 0.5 percent.

On Wednesday BP launched a series of lawsuits against its partners in the Deepwater Horizon rig, including the owner, Transocean, and Halliburton, the company that cemented the blown-out well that caused last year's Gulf of Mexico oil spill.

VODAFONE WEIGHS

Weakness in mobile telecoms heavyweight Vodafone was the biggest drag on the blue chips, down 2.6 percent and taking over 8.5 points off the FTSE 100, with traders citing a read-across from weakness in Dutch peer KPN's results and forecasts.

Downbeat newsflow from its peers in the United States and Europe also weighed on hotel operator InterContinental Hotels, down 2.1 percent.

Shore Capital highlighted concerns over the slowing pace of earnings momentum in U.S. hotel stocks, with decreasing scope for material upgrades, and repeated its "sell" stance.

But travel firm TUI Travel was the top FTSE 100 riser, up 2.8 percent, with traders citing the impact of an upgrade in rating by Deutsche Bank to "buy" from "hold".

On the high street, clothing retailer Next gained 1.5 percent as UBS raised its target price for the firm. Traders said Morgan Stanley had named the stock as its top pick in a more upbeat review of general retailers.

British retail sales rose unexpectedly in March, helped by stronger food sales on the month, while public sector borrowing for the fiscal year ended in March came in below the government's target, official data showed on Thursday. (Editing by Will Waterman)

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