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FTSE up as banks, commodities rise on Ireland deal

Published 11/22/2010, 04:19 AM
Updated 11/22/2010, 04:24 AM

* FTSE 100 index gains 0.6 percent

* Banks bounce on Ireland bailout deal

* Icap knocked by broker downgrade

By Jon Hopkins

LONDON, Nov 22 (Reuters) - Britain's top shares pushed higher in early deals on Monday, with banks gaining after Ireland agreed to a rescue package from European partners and the International Monetary Fund.

At 0903 GMT the FTSE 100 index was up 33.82 points, or 0.6 percent at 5,766.85, having closed 0.6 percent lower on Friday.

Banks provided fuel for the blue chip index's recovery, led by Barclays up 0.8 percent, as investors' concerns over European debt exposure faded.

The EU and the IMF agreed on Sunday to help bail out Ireland with loans expected to total 80 to 90 billion euros to resolve its banking and budget crisis.

"It's no surprise to see banks among the top risers having been pressured recently by the Ireland worries, but how long the rally will last is anyone's guess with the U.S. Thanksgiving holiday this week," said Mic Mills, head of electronic dealing at ETX Capital.

Integrated oils were the top blue chip performers as the crude price rose, led by BP, up 1 percent.

Miners were also in demand with Vedanta Resources, Kazakhys and Xstrata in demand, up 1.7-2.1 percent.

And market heavyweight Vodafone was up 0.7 percent after The Mail on Sunday newspaper reported that France's Vivendi met advisers last week to begin raising more than 7 billion euros to acquire Vodafone's 44 percent stake in French mobile phone network operator SFR.

ICAP IMPEDED

Among the fallers, interdealer broker ICAP was down 1.9 percent as broker Execution Noble cut its rating on the stock to a "hold" from a "buy".

Invensys was also hobbled by a broker downgrade, losing 0.4 percent, with traders saying Bank of America Merrill Lynch had cut its stance to "neutral" from "buy".

Tobaccos were the worst performing sector, with Imperial Tobacco amnd British American Tobacco losing 0.8 and 0.4 percent respectively.

The two have attacked government plans to force them to use plain brown packets, claiming it would facilitate counterfeiting, The Times newspaper said on Monday.

No domestic macroeconomic data was due for release on Monday, with little due all week aside from November's CBI distributive trades report on Thursday and the November Nationwide house prices survey.

Across the Atantic, October's Chicago Fed index will be released at 1330 GMT on Monday followed by a flood of U.S. data on Tuesday and Wednesday, including the first revision for Q3 GDP, the latest FOMC meeting minutes.

U.S. markets will be closed on Thursday for the Thanksgiving holiday, while Friday will see half-day closings for both the U.S. stock and bond markets. (Editing by Greg Mahlich)

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