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FTSE rally underpinned by U.S. jobs data

Published 08/26/2010, 11:55 AM
Updated 08/26/2010, 12:00 PM
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* FTSE up 0.9 percent as U.S. jobs data beats expectations

* Miners, energy rally with commods, Kazakhmys results

* Banks rebound with better news from Europe

By David Brett

LONDON, Aug 26 (Reuters) - Britain's top share index rose on Thursday, boosted by a rebound in commodity stocks and helped by better-than-expected economic data from the U.S.

The FTSE 100 closed up 46.44 points, or 0.9 percent, at 5,155.84, as London's blue chips rallied from a seven-week closing low on Wednesday.

Weekly jobless claims in the United States declined more than expected to a seasonally adjusted 473,000 in the latest week, well below market expectations for a drop to 490,000.

"The weekly unemployment claims are just giving an excuse for this market to have a bit of a technical bounce. I don't really think there is much more in it than that," said David Morrison, market strategist at GFT Global.

Kazakh copper miner Kazakhmys was the top FTSE 100 riser, up 5.2 percent after it reported a 130 percent rise in underlying first-half earnings per share and said it was on track to meet its full-year output goals.

Gold and silver prices steadied, but remained near recent highs after the U.S. data, with precious metal miner Fresnillo a big riser, up 4.8 percent.

Sector peers rallied after taking a mauling on Wednesday, along with metals prices, from gloomy reports on U.S. housing and durable goods orders.

Xstrata was up 2.4 percent after major shareholder Glencore International, the Swiss mining and commodities trading giant, posted robust first-half results on strong metals prices.

BHP Billiton climbed 2 percent as its chief executive flies to North America this week to crank up the charm offensive with Potash Corp shareholders after dousing expectations he would sweeten a $39 billion bid for the fertiliser giant.

Energy stocks also recovered after falls in the previous session, rising with crude prices.

Oil services and engineering group Amec added 5.1 percent after it posted a 20 percent jump in profits.

MORE DATA EYED

There will be more economic data on Friday, which should give further insight into the health of the global economy, with the second estimate of UK second-quarter GDP due at 0830 GMT and preliminary second-quarter U.S. GDP at 1230 GMT.

Investors are also awaiting a speech on Friday from Federal Reserve Chairman Ben Bernanke for clues on whether the Fed will support the economy with fresh injections of cash. Bernanke's speech will be the keystone of a three-day conference of central bankers from around the world at Jackson Hole, Wyoming.

Banks also bounced, with Germany's economy continuing to set the pace in the euro zone. Bank lending in the bloc is also showing signs of revival, data showed, but Spain and Italy face a harder road to recovery.

G4S rose 2.8 percent after the security services group reported a rise in first-half profit thanks to strong performance at its Asia and Middle East businesses, and said it expected more growth in the second half.

Segro topped the FTSE 100 fallers' list, down 3.8 percent, after the industrial property landlord reported first-half results and only a small rise in asset value per share. Evolution Securities cut its rating on the stock to "neutral" from "add", saying there was "no catalyst for equity outperformance".

Diageo, the world's biggest spirits group, fell 1.5 percent after its full-year results, with Credit Suisse cutting its 2011 earnings per share forecast for the company along with its price target. (Editing by Will Waterman)

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