FTSE hits 2-week closing high on commods, results

* FTSE closes 0.9 percent higher; gains for 2nd session

* Commodities advance; China tightening concerns wane

* Banks mixed on levy fears; UK coalition cabinet meets

By David Brett

LONDON, May 13 (BestGrowthStock) – Britain’s top stock index hit a
two-week closing high on Thursday as miners gained, tracking
stronger metals prices, but persistent concerns about euro zone
debt problems prompted investors to stay cautious.

The FTSE 100 (.FTSE: ) ended up 50.28 points, or 0.9 percent,
at 5,433.73 — the highest close since April 30. The blue chip
index has gained around 6 percent so far this week, recovering
most of last week’s 7.7 percent fall.

Miners rallied along with stronger metal prices, with key
base metals prices rising 0.9 to 3.5 percent. Eurasian Natural
Resources (ENRC.L: ), Fresnillo (FRES.L: ) and BHP Billiton (BLT.L: )
added 3.2 to 3.8 percent.

Gold hovered near its all-time high, helping gold miner
Randgold Resources (RRS.L: ) to add 1.8 percent.

The sector (.FTNMX1770: ) remains almost 14 percent off 2010
highs hit in late March, as concerns over potential China
monetary tightening and euro zone debt issues have weighed on
demand.

“Sentiment remains fairly fragile with concerns about
sovereign risk never far away from the markets gaze,” said
Michael Hewson, an analyst at CMC Markets.

Investors were relieved by measures from Portugal and Spain
to trim their budget deficits, offering reassurance the euro
zone was addressing deep-rooted fiscal problems. [ID:nLDE64B0SK]

Energy shares also rebounded with Royal Dutch Shell (RDSa.L: )
and BG Group (BG.L: ) up 1.1 and 0.4 percent respectively.

BP (BP.L: ) rose 1.1 percent as the energy giant moved forward
with untested solutions aimed at containing the spreading oil
spill from a ruptured well in the Gulf of Mexico.
[ID:nN12184598]

UPBEAT RESULTS

Bullish results from Britain’s leading corporates helped
improve sentiment. BT Group (BT.L: ) jumped 10.8 percent after
full-year results beat market expectations. [ID:nLDE64523R]

Private equity group 3i Group (III.L: ) rose 7.6 percent after
the value of its portfolio rose 15 percent last year.

Insurer Old Mutual (OML.L: ) added 1.6 percent after an upbeat
first-quarter trading update and with continuing speculation
over Standard Chartered’s (STAN.L: ) interest in its 54 percent
stake in South Africa’s Nedbank (NEDJ.J: ).

Sainsbury (SBRY.L: ) put on 3.2 percent after Britain’s No.3
grocer full-year profits beat forecasts. [ID:nLDE64C05G]

Banks were mixed as investors speculated on what impact
there would be from potential measures levied on the sector by
the new UK coalition government.

HSBC (HSBA.L: ) and Standard Chartered (STAN.L: ) fell 0.2 and
0.7 percent respectively. Sentiment was also strained as French
lender Credit Agricole (CAGR.PA: ) missed first-quarter profit (Read more your timing to make a profit.)
forecasts.

But UK state-backed Lloyds Banking Group (LLOY.L: ) and Royal
Bank of Scotland (RBS.L: ) climbed 1.8 and 1.6 percent
respectively, after Wednesday’s declines.

The market kept a close eye on the new British government,
with Prime Minister David Cameron holding his first cabinet
meeting on Thursday.

Reducing Britain’s record budget deficit of over 11 percent
of national output will be the first test of the relationship
between the centre-right Conservatives and smaller centrist
Liberal Democrats. [ID:nLDE64C090]

The economic data from the United States was mixed. The
number of U.S. workers filing for jobless benefits fell only
slightly last week, highlighting the challenges facing the
labour market.

Meanwhile, U.S. import prices pointed to tame inflation,
according to government data, easing any concerns that the
Federal Reserve would need to raise interest rates anytime soon.
[ID:nN13129786]

Investing Advice

(Editing by Karen Foster)

FTSE hits 2-week closing high on commods, results