* Miners boosted by firmer commodity prices
* Defensives weaker, tobaccos retreat
* U.S. confidence data awaited
By Simon Falush
LONDON, Sept 11 (Reuters) - Gains in miners and banks,
spurred by increasing optimism about a global economic recovery,
helped push Britain's top share index up 0.8 percent, beyond the
5,000 mark by midday on Friday.
By 1101 GMT, the FTSE 100 index <> was 38.72 points
higher at 5,026.40, having closed 16.62 points, or 0.3 percent,
lower on Thursday at 4,987.68.
The benchmark index closed above 5,000 for the first time
since late September 2008 on Wednesday.
Some investors, however, expressed caution on the outlook
given the extent and speed of the rally since March.
"Some people are saying 'oh my God, I missed out on the
rally I better jump in', but the market is not looking cheap any
more and the market does feel as if it's run ahead of itself,"
said Tineke Frikee, manager of the Newton Higher Income fund.
The UK blue-chip index has risen 45 percent since hitting a
six-year trough in March, though it is still down 7.2 percent
from its level in mid-September 2008, before the collapse of
Lehman Brothers.
Improved risk appetite has helped push the dollar to a
one-year low, which has lifted commodity prices, benefiting
miners.
Miners were also higher after solid industrial output data
from China boosted the demand outlook for metals.
Antofagasta <ANTO.L>, Xstrata <XTA.L>, Rio Tinto <RIO.L>,
BHP Billiton <BLT.L>, and Anglo American <AAL.L> gained 1.4 to
3.4 percent.
Banks were also stronger as investors bet that they would
benefit from a recovering economy.
Lloyds Banking Group <LLOY.L> added 1.8 percent as SG
Securities assumed coverage of the bank with a "buy" rating and
160 pence target price.
Lloyds Banking Group's Irish unit, Bank of Scotland
(Ireland), wants to participate in a potential merger to create
a "third force" in Irish banking, the Irish Times reported on
Friday. []
Royal Bank of Scotland <RBS.L> gained 1.3 percent with SG
Securities assuming coverage of it with a "hold" rating and 55
pence target price, while Barclays <BARC.L> added 0.4 percent,
and HSBC <HSBA.L> firmed 0.6 percent.
MAN GROUP SHINES
British hedge fund manager Man Group <EMG.L> was the FTSE's
star performer, gaining 8.4 percent, buoyed by a Reuters report
on Thursday that the company expects positive net inflows of
client money for the industry as a whole by the end of 2009.
[]
Elsewhere among financials, insurer Prudential <PRU.L>
gained 1.2 percent as the firm's chief executive-elect, Tidjane
Thiam, said it would look to Asia as a source of capital and
could even seek to raise equity there, according to a Financial
Times report. []
Defensive stocks, which tend to underperform in a rising
market, were a slight drag on the index.
Tobacco stocks were the biggest blue-chip fallers, giving up
some gains made on Thursday following positive broker comments,
with British American Tobacco <BATS.L> falling 1 percent.
Drugs firm GlaxoSmithKline <GSK.L> lost 0.3 percent, while
drinks group Diageo <DGE.L> and food producer Associated British
Foods <ABF.L> both fell 0.5 percent, and mobile phones
heavyweight Vodafone <VOD.L> slipped 0.2 percent.
British producer input prices rose at their fastest monthly
rate in more than a year in August, driven by oil costs and
pushing factory gate inflation slightly higher on the month.
Later in the session investor attention will be drawn across
the Atlantic, to the University of Michigan September consumer
sentiment data, U.S. import/export prices for August, wholesale
inventories/sales for July, and the Federal budget for August.
(Editing by Simon Jessop)
