FTSE gains 0.2 pct; firm banks offset weak miners

* FTSE up 0.2 pct; banks in demand

* Volatility on FTSE 100 due to options expiry – traders

By Tricia Wright

LONDON, Feb 19 (BestGrowthStock) – Britain’s top share index rose
slightly on Friday, extending its advance into a fifth
consecutive session, as strength from banks and defensive stocks
offset falls from miners in volatile trade.
By 0914 GMT, the FTSE 100 (.FTSE: ) was up 10.77 points, or
0.2 percent, at 5,335.86, after ending 0.9 percent higher on
Thursday, its highest close since Jan. 21.

Traders put some of the volatility early on Friday down to
futures and options expiry, which take place in London between
1000-1015 GMT.

Banks built on Thursday’s strong advance, with investors
still inspired by Barclays’s (BARC.L: ) forecast-beating results
at the start of the week.

Barclays rose 0.8 percent, while Royal Bank of Scotland
(RBS.L: ), scheduled to post results next week, was up 1.1 percent
and HSBC (HSBA.L: ) added 0.4 percent.

RBS’s revised long-term reward plan for top executives will
be fully agreed with shareholders before it is put to the
market, a top investor said, a move to avoid any investor revolt
on the issue. [ID:nLDE61H2H4]

Miners fell, reversing the previous session’s solid gains,
as metals prices came under pressure from a stronger U.S. dollar
after the Fed’s first monetary policy move since December 2008.

Fresnillo (FRES.L: ), Randgold Resources (RRS.L: ) and
Antofagasta (ANTO.L: ) were among the worst off, shedding 1.2 to
1.9 percent.

Anglo American (AAL.L: ) dropped 1.5 percent. The company
declined to reinstate a dividend on Friday after posting a
forecast-beating 51 percent fall in annual earnings per share on
the back of falling metal prices. [ID:nLDE61H1AM]

The Dow Jones Industrials (.DJI: ) ended 0.8 percent higher on
Thursday, but after the U.S. close the Fed signalled a quarter
percentage point increase in its discount borrowing rate and
U.S. stock futures (SPc1: ) dropped. [ID:nSGE61I036]

“This is one of those things that will give the market a bit
of a pause for thought for a day or two, but the more serious
rate hikes are still a long way off,” said Peter Dixon,
economist at Commerzbank.

DEFENSIVES IN FAVOUR

Defensive stocks were in favour as investors’ risk appetite
dwindled.

British American Tobacco (BATS.L: ) was the top FTSE 100
riser, up 0.9 percent, bolstered by a target price hike from
Nomura, while peer Imperial Tobacco (IMT.L: ) rose 0.4 percent.

Consumer goods giant Unilever (ULVR.L: ) rose 0.6 percent
after Swiss peer Nestle (NESN.VX: ) beat forecasts for 2009.

On the second line, Rentokil Initial (RTO.L: ) topped the
leaders board, adding 6.4 percent after the pest control to
parcel delivery firm reported sharply higher profit, helped by
cost cuts. [ID:nLDE61I08X]

Later on Friday attention will be on the U.S. inflation
numbers, due at 1330 GMT, with January core CPI seen up 0.3
percent, after a 0.1 percent rise in December.

“I think the FTSE will trade more or less sideways for the
near term,” said Commerzbank’s Dixon.

“(This is) primarily because on valuation grounds I think
there are good reasons for the market to go up, but on fear
factor grounds we could see a bit of a sell-off — balancing
those forces together it’s a fairly dull outlook.”

Investing Research
(Editing by Sharon Lindores)

FTSE gains 0.2 pct; firm banks offset weak miners