FTSE 0.6 percent firmer as financials, miners gain

By Simon Falush

LONDON (BestGrowthStock) – Britain’s top share index was up 0.6 percent early on Wednesday, as banks and miners rose, bolstered by growing confidence on the global economic outlook.

By 0853 GMT the FTSE 100 (.FTSE: ) was up 30.08 points, at 5,274.14, touching a two-week high after it added 1.5 percent on Tuesday.

But the index is still down 2.6 percent on the year after a sharp sell-off in January and investors remain cautious about the outlook for equity markets.

“Company results are a bit better than expected, we are following through from strong Barclays results but I don’t think we are in a real uptrend and we are recovering from a serious sell-off in January,” said Colin McLean, managing director at Scottish Value Management in Edinburgh.

U.S. stocks (Read more about the stock market today. ) posted their biggest daily percentage gain in three months on Tuesday after strong revenue from drugmaker Merck (MRK.N: ) and regional manufacturing data instilled confidence in the economic outlook.

Investors remained upbeat on banks after strong results from Barclays (BARC.L: ) the previous session indicated the financial sector may be in better shape than many had feared.

Adding to strong gains on Tuesday, Barclays gained 2.7 percent while HSBC (HSBA.L: ), Standard Chartered (STAN.L: ), Royal Bank of Scotland (RBS.L: ) and Lloyds Banking Group (LLOY.L: ) added 1.3-2.6 percent.

Other financial stocks were also stronger, with Man Group (EMG.L: ) the top gainer, up 5.1 percent, supported by market chatter that BlackRock (BLK.N: ) was interested in taking a stake and as investors reacted positively to weekly results of its AHL Diversified fund which showed a 0.15 percent gain.

Insurer Legal & General (LGEN.L: ) was 1.8 percent firmer after it met expectations with a 7 percent drop in sales but doubled British cash generation and said it expected a rebound in its key home insurance market in 2010.

Miners also gained as metal prices firmed, supported as the dollar stayed weaker after the euro held onto sharp gains made the previous session. Rio Tinto (RIO.L: ), Xstrata (XTA.L: ), Lonmin (LMI.L: ), Anglo American (AAL.L: ), Kazakhmys (KAZ.L: ) and BHP Billiton (BLT.L: ) added 0.9-1.7 percent.

Aerospace group Cobham (COB.L: ) rose 3.3 percent, bolstered by news it has won a contract to make components for new helicopters to be used by the U.S. army.

Investors were eyeing British unemployment data, scheduled for release at 0930 GMT, and minutes from the Bank of England’s Monetary Policy Committee, also due at 0930 GMT.

Later in the session, the U.S. import price index, due at 1330 GMT, and U.S. industrial production data for January, due at 1415 GMT, will provide a focus.

BP (BP.L: ), Carnival (CCL.L: ) and Scottish & Southern Energy (SSE.L: ) went ex-dividend, knocking 7.18 points off the index.

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(Editing by Dan Lalor)

FTSE 0.6 percent firmer as financials, miners gain