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FTSE up 0.6 pct; best weekly rise since Jan

Published 07/17/2009, 12:07 PM
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* FTSE 100 registers fifth day of gains

* Markets boosted by Q2 earnings season in the U.S.

* Citigroup and BoA beat consensus estimates

* Crude oil price surges above $63/bbl, miners rise

By David Brett

LONDON, July 17 (Reuters) - London's top share index posted its fifth consecutive gain on Friday, as oils, miners and banks all rallied, with traders cheering better than expected corporate results from the United States.

The FTSE 100 closed up up 26.91 points, or 0.6 percent, at 4388.75, securing its biggest weekly rise since early January.

U.S. banking giants Citigroup and Bank of America unveiled consensus-beating second-quarter earnings, following results from IBM, Intel, Goldman Sachs and JPMorgan Chase.

"This past week has been very good for the equity market as better than expected U.S. earnings has help fuel a mini bounce in stocks globally," said Angus Campbell, head of sales at Capital Spreads. "What difference a week makes!"

Mining stocks added most points to the UK benchmark as metal prices firmed, with investor confidence growing. Eurasian Natural Resources was the biggest blue-chip gainer, up 5.8 percent, with Xstrata, Rio Tinto, Antofagasta, Anglo American and Kazakhmys adding between 1.6 and 4.3 percent.

Vedanta Resources rose 4.2 percent after the India-focused group said it planned to expand to steel manufacturing with a partner, and boosted as Deutsche Bank lifted its price target on the company to 1,440 pence from 1,419 pence.

Energy stocks surged as crude prices jumped above $63 a barrel. BG Group, BP, Cairn Energy and Royal Dutch Shell added between 0.6 and 1.7 percent.

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Tullow Oil rose 2.8 percent, helped by Panmure Gordon starting coverage on the stock with a "buy" rating and 1,150 pence target price.

Banks were also in positive territory, buoyed by strong earnings from U.S. peers. Standard Chartered, HSBC and Royal Bank of Scotland rose 0.7-2 percent.

BA CLIMBS HIGHER

British Airways climbed 3.9 percent, as the market responded well to plans by the airline to raise around 600 million pounds through a combination of bondholder debt and bank credit.

BA also reported an operating loss of 100 million pounds for the three months ending June 30, but analysts said this was better than feared.

On the downside, UK mobile heavyweight Vodafone was the index's heaviest weighted faller, down 1.8 percent.

Severn Trent fell 1.3 percent as Morgan Stanley cut its recommendation on the water company to "underweight" from "equal weight".

A broker downgrade also weighed on distribution group Bunzl , off 2.5 percent, as Banc of America-Merrill Lynch downgraded its stance on the firm to "neutral" from "buy".

Elsewhere, engineering firm Invensys fell 1.3 percent, as it said reduced volumes in its short-cycle products would impact first half performance.

Defensive drugmakers GlaxoSmithKline and AstraZeneca fall 0.8 and 0.5 percent repsectively, despite UBS saying it expects the latter's earnings to beat brokerage forecasts.

"One can't help thinking that this recent move has come all too soon and too fast," Campbell said

"With momentum behind the bulls right now it's difficult to say that this rally won't last, but there's still so much evidence that the bearish fundamentals are little different to a couple of weeks ago." (Editing by Greg Mahlich)

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