Energy firms, banks push FTSE higher

By Simon Falush

LONDON (BestGrowthStock) – Gains in energy stocks and banks helped push Britain’s top share index higher by midday on Wednesday, with investors buying riskier assets as the outlook for euro zone debt improved slightly.

By 1101 GMT, the FTSE 100 (.FTSE: ) was up 12.35 points, or 0.2 percent, at 5,230.17, pushing the recent rally into a sixth straight session, its longest winning run since September, after it ended up 15.69 points, or 0.3 percent, on Tuesday.

Energy stocks provided most of the fuel for the rally as crude held around $77 per barrel and touched its highest level since mid May. Royal Dutch Shell (RDSa.L: ) stood out with a rise of 1.5 percent.

Cairn Energy (CNE.L: ) added 1 percent. The company received Greenland government approval for the first of two wells of an exploration program.

Strongly-subscribed government bond auctions on Tuesday in Ireland, Belgium and Spain helped to allay anxiety on the euro zone debt situation, which helped drag the FTSE 100 6.6 percent lower in May.

The index is down 10 percent since fears on the euro zone debt crisis escalated and investors noted there was still reluctance to buy heavily into the market.

“Volumes are not great which shows there’s still a lot of money on the sidelines and we’ll need positive economic and company news to drive it much higher,” said Colin McLean managing director at Scottish Value Management in Edinburgh.

Banks were a big driver of gains as investors moved into more cyclical stocks. Royal Bank of Scotland (RBS.L: ) led the way, up 1.6 percent.

Miners such as Rio Tinto (RIO.L: ) and Xstrata (XTA.L: ) were mostly stronger, but Lonmin (LMI.L: ) and Fresnillo (FRES.L: ) eased after both were downgraded to “underweight” from “neutral” in a sector review by JPMorgan.

POWER LIFT

Aggreko (AGGK.L: ) was among the top blue-chip gainers, up 1.7 percent after Citigroup upgraded the temporary power supplier to “buy” from “hold,” saying an investor trip to Africa highlighted its opportunities over the short, medium and long term.

But fund manager Schroders (SDR.L: ) was a faller, down 3 percent as Citigroup cut its rating to “sell” from “buy.”

Other fallers included DIY retailer Kingfisher (KGF.L: ) which was downgraded to “neutral” from “buy” by BofA Merrill Lynch, and defensive stocks like Imperial Tobacco (IMT.L: )

Stocks going ex-dividend clipped 1.1 points off the FTSE 100 on Wednesday, with Severn Trent (SVT.L: ), United Utilities (UU.L: ), and 3i Group (III.L: ) losing their payout attractions.

British consumer confidence fell to its lowest level in almost a year last month as the election and the prospect of an emergency budget darkened households’ outlook, a survey by the Nationwide Building Society showed on Wednesday.

The number of people claiming jobless benefits in Britain fell more than expected in May to its lowest rate in more than a year, but the wider measure of unemployment continued to climb, official data showed on Wednesday.

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(Editing by Mike Nesbit)

Energy firms, banks push FTSE higher