Banks, miners rebound; FTSE up ahead of UK GDP

By David Brett

LONDON (BestGrowthStock) – Britain’s top shares rose early on Friday, having fallen sharply over the previous two-days, supported by rebounding banks and miners ahead of UK GDP data.

By 4:03 a.m. ET, the FTSE 100 (.FTSE: ) was up 34.21 points, or 0.6 percent at 5,699.54, having closed at its lowest level since March 22 on Thursday following news that Greece’s deficit widened more than expected, which hit investor sentiment.

“There’s been a sharp deterioration in Greece, which has led to growing fears of contagion, but supportive events tend to happen over the weekend, and we’ve had some stonkingly good earnings numbers,” said Steven Bell, director at hedge fund GLC.

The FTSE took its cue from late gains on Wall Street (.DJI: ) overnight when strong quarterly profits from consumer bellwethers such as Starbucks Corp (SBUX.O: ) lifted some of the gloom hanging over the market.

Banks were higher, with HSBC (HSBA.L: ), Barclays (BARC.L: ) and Lloyds Banking Group (LLOY.L: ) up 0.7-1.4 percent.

Royal Bank of Scotland (RBS.L: ) gained 3.1 percent after an upbeat note from Barclays Capital.

The sector has been volatile with investors weighing uncertainty over regulation and exposure after fraud charges were leveled against U.S. giant Goldman Sachs (GS.N: ) and the Greece situation against recent upbeat broker comment.

Investors will watch GDP data released at 4:30 a.m. ET for more clues on the health of the economy ahead of an election to be held on May 6.

Analysts expect Britain’s economy to have expanded by 0.4 percent in the first quarter of this year, matching the rate of expansion recorded in the final three months of 2009.

Miners rallied with Fresnillo (FRES.L: ), Lonmin (LMI.L: ), ENRC (ENRC.L: ) and Kazakhmys (KAZ.L: ) up 0.3 to 1.5 percent.

Vodafone (VOD.L: ), the top weighted faller on Thursday, rebounded 0.5 percent.

Carnival (CCL.L: ) added 3.7 percent with traders citing benefits to the cruise operator from the huge ash cloud which closed much of Europe’s airspace over the past week.

SKITTISH GAINS

Highlighting the tentativeness of the rally, defensive issues, which tend to perform better when the market is under pressure, were among the list of gainers.

British American Tobacco (BATS.L: ) and Imperial Tobacco (IMT.L: ) rose 0.4 and 0.3 percent respectively, world’s No.4 retailer Tesco (TSCO.L: ) gained 1 percent and drugmakers including Shire (SHP.L: ) added 0.1 percent.

Insurers were weaker with Prudential (PRU.L: ) down 0.2 percent. The Times reported that Hedge Funds targeting the insurer have wagered at least 119 million pounds that the stock would fall, ahead of the Pru’s ambitious $21 billion capital raising.

Old Mutual (OML.L: ), Standard Life (STAN.L: ) and Aviva (AV.L: ) fell 0.2-0.7 percent.

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(Editing by Mike Nesbit)

Banks, miners rebound; FTSE up ahead of UK GDP