Rallying miners push FTSE higher

* FTSE 100 gains 0.4 pct

* Miners lead advance as commodity prices extend rally

* Lloyds Banking, Home Retail blighted by broker downgrades

By Jon Hopkins

LONDON, June 14 (BestGrowthStock) – Britain’s top share index gained
0.4 percent in early deals on Monday, mirroring gains in Asia
and pre-weekend on Wall Street as investors’ risk appetite
returned, with stronger commodity prices lifting miners.

At 0759 GMT, the FTSE 100 index (.FTSE: ) was 22.45 points or
0.4 percent higher at 5,186.13, having ended 31.18 points, or
0.6 percent higher on Friday, its third straight session of
gains.

Miners led the FTSE 100 advance as base metal prices
extended Friday’s rally, underpinned by gains in oil (CLc1: ) and
gold.

Silver miner Fresnillo (FRES.L: ) was the top blue chip
gainer, up 2.8 percent, while Kazakhmys (KAZ.L: ), Anglo American
(AAL.L: ), Vedanta Resources (VED.L: ). BHP Billiton (BLT.L: ), and
Rio Tinto (RIO.L: ) took on 1.7 to 2.6 percent.

“It’s looking a bit more well-bid at the moment … people
are reverting to value now, trying to find old fashioned stocks
that are more hardy,” said Rob Pike, a trader at Spreadex.

“I know the miners are fairly volatile, but the fundamentals
on them are fairly attractive to some investors at the moment.”

But energy issues were the biggest blue chip fallers,
weighed down by big falls from (BP.L: ), off 2.3 percent as
investors fretted over the future for dividends ahead of a board
meeting to be hold on Monday.

U.S. President Barack Obama is expected to press BP
executives this week to set up an escrow account to pay damage
claims by individuals and businesses hurt by the Gulf of Mexico
oil spill disaster. [ID:nLDE65C01I]

Royal Dutch Shell (RDSa.L: ) and BG Group (BG.L: ) lost 0.1 and
0.7 percent, respectively, failing to be supported either by the
firmer crude price or an upgrade in sector stance to “bullish”
by Nomura for the European integrated oils.

LLOYDS A LOSER

Lloyds Banking Group (LLOY.L: ) was also a big faller, down
1.4 percent. The bank is considering a stock market flotation of
the chain of 600 branches that it is being forced to sell by
European Union regulators, the Sunday Times said.
[ID:nLDE65C09K]

Morgan Stanley, meanwhile, cut its stance on the
part-nationalised bank to “underweight” from “equal-weight”,
saying it faces the biggest risk among UK banks of missing
consensus beyond full-year 2010.

But other banks managed to gain as investors’ risk appetite
returned. Barclays (BARC.L: ) added 1.2 percent, with its
investment banking arm, Barclays Capital set to mount a
strategic push to launch a pan-European “dark pool” trading
platform, the Financial Times said.

And Royal Bank of Scotland (RBS.L: ) added 0.8 percent.
Santander (SAN.MC: ), the Spanish bank, is set to buy 318 branches
from RBS, having submitted an indicative offer of about two
billion pounds in April, the Guardian reported.

Among individual blue chip fallers, Home Retail Group
(HOME.L: ) shed 0.1 percent as JP Morgan cut its stance on the
Argos-stores owner to “underweight” from “overweight” following
last week’s disappointing trading update.

But on the up after broker comment, plumbing supplies firm
Wolseley (WOS.L: ) added 1.0 percent as RBS hiked its rating to
“hold” from ” sell” with an increased target price.

Britain’s new fiscal policy watchdog is due to give
estimates later on Monday which are expected to pour cold water
on the previous government’s hopes for a powerful recovery and
offer hints on the scale of spending cuts and tax hikes seen as
needed to rein in the budget deficit. [ID:nLDE65C0O7]

Britain’s economy remains on track for recovery but imminent
fiscal tightening will mean progress is slow and output will not
return to its pre-recession level until 2012, the Confederation
of British Industry said. [ID:nLDE65A1BR]

Stock Market Report

(Editing by Hans Peters)

Rallying miners push FTSE higher