* FTSE 100 gains 1.4 percent, touches highest in a month
* Investors see further govt, BoE stimulus measures
* Miners, oils top gainers
By Simon Falush
LONDON, Dec 9 (Reuters) - Britain's top share index gained
1.4 percent by midday on Tuesday, touching its highest level in
a month as investors shrugged off a raft of weak data in
anticipation of further growth-boosting government action.
By 1119 GMT, the FTSE 100 <> was up 61.85 points at
4,361.91 after gaining 6.2 percent on Monday, reaching its
highest level since Nov 11 though still down 32.4 percent this
year.
Energy stocks added most points to the index, as fears about
the outlook for demand easing somewhat, with crude stabilising
at around $43 per barrel.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, Cairn Energy <CNE.L>
and BG Group <BG.L> added between 2 and 4.4 percent.
British industrial output fell at its sharpest pace in
nearly six years in October and revisions to the previous
month's data could mean the economy shrank even faster in the
third quarter than originally thought. []
But investors said the ailing health of the economy will
force the Bank of England to cut rates further, and the
government to increase spending once again.
"Markets have come down a long way, so expectations are very
low," said Grahame Exton, investment director at Tilney Fund
Management.
"The data reinforces a view that there will be more
reflationary measures and more rate cuts, so people are looking
through the bad news as a forerunner to more good news."
The BoE cut the base rate by 100 basis points to 2 percent
last week, bringing it to its lowest level since 1951, and
indicated that more might need to be done to prevent a prolonged
recession.
Exton added that low rates were forcing fund managers with
relatively large cash positions to look at reinvesting assets in
equities.
British house sales fell to a record low and prices fell
sharply, though at a slightly lower pace, the Royal Institution
of Chartered Surveyors said. []
Banks, many of which are heavily exposed to the UK property
market, were mixed.
HBOS <HBOS.L>, Royal Bank of Scotland <RBS.L>, and HSBC
<HSBA.L> fell between 0.4 and 1.4 percent while Barclays
<BARC.L>, Standard Chartered <STAN.L>, and Lloyds TSB <LLOY.L>
gained 2.8 to 4.3 percent.
Meanwhile, the climate for Britain's embattled retailers
continues to worsen.
Retail sales fell at their sharpest pace in more than three
years in November, the British Retail Consortium said
[], while profits are set to plunge at high street
stores by 3.6 billion pounds ($5.3 billion), according to
researchers Verdict. []
However, analysts said that given the grim economic
backdrop, investors are not too alarmed by this type of data.
"There's a lot of bad news priced in, and the market is
taking theses numbers in its stride. It will take a substantial
disappointment to dent stocks," Griffiths said.
Marks & Spencer <MKS.L> gained 2.9 percent, Kingfisher
<KGF.L> added 2.6 percent and Next <NXT.L> put on 2.6 percent.
Miners also gained in the face of falling metal prices, with
copper down 5.3 percent <MCU3=LX>.
Kazakhmys <KAZ.L> gained 5.7 percent, helped by a Seymour
Pierce upgrade to "buy", while Rio Tinto <RIO.L> added 3.6
percent and Anglo American <AAL.L> climbed 2.3 percent.
Heavyweight mobile telephone operator Vodafone <VOD.L>
gained 0.1 percent. It said it would make a public offer for
navigational and locating services firm Wayfinder Systems,
valuing the Swedish company at $30 million.
(Editing by John Stonestreet)
