By Raissa Kasolowsky
LONDON, Feb 14 (Reuters) - Britain's top share index rose on
Thursday, led by miners, while investors braced for the U.S.
Federal Reserve Chairman Ben Bernanke's latest take on the state
of the world's largest economy.
Lonmin <LMI.L>, the world's No.3 platinum producer rose 3.8
percent as platinum hit a record high for the 11th straight day.
Elsewhere in the sector, Xstrata <XTA.L>, BHP Billiton,
Anglo American <AAL.L> and Rio Tinto <RIO.L> gained as much as
2.8 percent, also on hopes for more consolidation in the sector.
The Times newspaper said Rio Tinto had indicated it could
look for new acquisitions this year and Anglo American headed
many of its shareholders' wishlist. Rio declined to comment.
At 1222 GMT the FTSE 100 index <> was up 0.5 percent at
5,907.7, helped by an overnight rally in U.S. stocks, which
benefited from a surprise gain in January retail sales even as
other data has suggested the U.S. economy is on the verge of a
recession.
But Peter Dixon, an economist at Commerzbank, said the data
could suggest the crisis was limited to the financial sector for
the time being:
"What it tells us is that so far at least, the sub-prime
crisis is largely confined to the financial sector and that the
real economy is not feeling the full effects of that slowdown."
Data on Wednesday showed U.S. retail sales rose 0.3 percent
in January, in stark contrast to Wall Street's prediction of a
0.2 percent drop.
For a fresh insight into the U.S. economy investors would
look to Fed Chairman Ben Bernanke and Treasury Secretary Henry
Paulson who both testify at 1500 GMT.
Paulson is expected to tell Congress that the United States
is experiencing a "significant" housing market downturn but the
economy is fundamentally sound and should avoid recession.
Oil stocks also supported the index, benefiting from crude
prices above $94 a barrel. Heavyweights BP <BP.L> and Royal
Dutch Shell <RDSa.L> traded higher.
CREDIT WOES
But more negative news out of the financial sector hit
banks.
Merrill Lynch said the shock 226 million pounds of
write-downs in UK mortgage lender Bradford & Bingley <BB.L>
announced on Wednesday was keeping UK banks under pressure.
Shares in HBOS <HBOS.L>, which has the biggest treasury
portfolio, fell more than 4 percent making it the FTSE's biggest
percentage loser. Alliance & Leicester <ALLL.L>, RBS <RBS.L> and
Barclays <BARC.L> fell between 1.2 and 2.3 percent.
European banks also struggled, with UBS <UBSN.VX> down 5.2
percent after saying it expected 2008 to be another difficult
year and unveiling more exposure to risky U.S. mortgages.
But for now investors bought back into the market.
Diageo <DGE.L> rallied 4.8 percent to top the FTSE gainers
after the world's biggest alcoholic drinks group posted a 15
percent rise in half-year earnings. See []
British Energy <BGY.L> rose 3.6 percent on top of the
previous session's 9 percent gains after the Times said the UK's
biggest electricity generator was considering a 5.5 billion
pound break-up plan that would involve creating a new company
focused on building the next generation of nuclear power plants.
British engine maker Rolls-Royce <RR.L> added 3 percent
after Cazenove raised its rating on the stock.
