FTSE rallies for fourth day as commodities rise

                                
 (Adds Bradford & Bingley close)
                                
 By Amanda Cooper
                                
 LONDON, May 19 (Reuters) - British blue-chip shares rose on
Monday for the fourth day in a row, hitting their highest close
in over four months, driven by commodity stocks as crude oil
held within sight of recent record highs and as positive broker
comment helped miners.
                                
 Index heavyweights Royal Dutch Shell <RSDa.L> and BP <BP.L>
were up between 1.3 and 3 percent, while Cairn Energy <CNE.L>
and Tullow Oil <TLW.L> were up between 2 and 3 percent, as crude
oil held above $126 a barrel.
                                
 Miners were in demand as precious metals rallied. Large-caps
BHP Billiton <BLT.L>, Rio Tinto <RIO.L>, Anglo American <AAL.L>
and Xstrata <XTA.L> rose between 1.6 and 4 percent.
                                
 Vedanta Resources <VED.L> shot up nearly 9 percent after a
rating upgrade from Citi, while Kazakhmys <KAZ.L> rose 6 percent
after Credit Suisse added the stock to its Europe focus list.
                                
 "At the start of the rally back in late March, there was a
lot of short covering and now you sense there is a fear among
buyers thinking 'I missed out on almost 1,000 points, I need to
get back in before (the index) goes up another 1,000 points',"
said Jim Wood-Smith, head of research at Williams de Broe.
                                
 "A rising market builds its own momentum."
                                
  The FTSE 100 <.FTSE> closed up 72.2 points, or 1.15 percent
at 6,376.5 points, hitting its highest closing level in just
over four months. The FTSE has risen for four consecutive
trading days, making this its best run since a six-day rally in
mid-December.
                                
 The FTSE has fallen by about 1.2 percent so far this year,
but has rallied by nearly 18 percent since mid-March, in spite
of a stream of downbeat news on the British economy and a high
degree of uncertainty over the outlook for the U.S. economy as
inflation persists and growth slows.
                                
 "There is a signal that the U.S. did not go into recession.
We are beginning to sense that earnings from the non-financial
sector were generally far better than expected," said Stephen
Pope, head of equity research at Cantor Fitzgerald.
                                
 "The fact we broke through the 6,227 level was very
encouraging and I imagine we are now going to press up, not in a
straight line, around the 6,420-6,450 level," Pope said, looking
at the FTSE 100 chart.
                                
 The pharmaceutical sector was among the top performers on
the FTSE, after European authorities approved the first
pre-pandemic bird flu vaccine, Prepandrix, made by
GlaxoSmithKline <GSK.L>.
                                
 Glaxo stock rose 1.2 percent to rank it among the top ten
positive weights on the FTSE, while AstraZeneca <AZN.L> rose
nearly 3 percent, driven by market talk of a possible bid from
U.S. rival Pfizer <PFE.N>. An Astra spokesman declined to
comment.
                                
 Shares in mid-cap kitchen equipment maker Enodis <ENO.L>
rose 2.4 percent after U.S. diversified manufacturer Manitowoc
<MTW.N> said it had raised its bid for the company to 1.08
billion pounds ($2.1 billion) to trump a rival offer.
                                
 
                                
 BRADFORD & BINGLEY SLIDES
                                
 Banks were the heaviest negative weight on the index,
although the sector did pare losses as the session wore on.
                                
 Among the mid-caps, specialist mortgage lender Bradford &
Bingley <BB.L> slid nearly 16 percent to an all-time low, hit by
concerns over its 300 million pound cash call and the future of
its chief executive, as well as over its outlook in
deteriorating markets, with some analysts already valuing the
firm as if it is no longer writing new business.
                                
 Royal Bank of Scotland <RBS.L> fell nearly 4 percent, which
dealers blamed on technical factors related to its shares
trading "ex-rights" and the glum mood surrounding both the stock
and the UK banking sector.
                                
 HBOS <HBOS.L>, Lloyds TSB <LLOY.L> and Alliance & Leicester
<ALLL.L> were all down between 0.7 and 2.4 percent, while
Barclays <BARC.L> and HSBC <HSBA.L> pared earlier losses to
trade up between 0.6 and 0.7 percent.
                                
 Other decliners included BAE Systems <BAES.L> which shed 1.8
percent after the company said U.S. officials investigating
alleged bribes in a Saudi arms deal subpoenaed its chief
executive Mike Turner and non-executive director Nigel Rudd.
[ID:nN18492328]
                                
 (Additional reporting by Rebekah Curtis and Dominic Lau;
editing by Sue Thomas/Rory Channing)