* FTSE 100 gains 1.2 percent
* Miners up on metals prices
* Retailers gain as trading news better than feared
* Banks lose ground; short-selling ban set to expire
By Simon Falush
LONDON, Jan 6 (Reuters) - Britain's top share index gained
1.2 percent on Tuesday, maintaining a six-day post-Christmas
rally in the face of data highlighting the fierce headwinds
buffeting the economy as miners rose on firmer metals prices.
By 1143 GMT the FTSE 100 <> was up 52.71 points at
4,632.35 after gaining 0.4 percent on Monday and is up from a
low of below 3,700 set in late October.
Heavyweight miners gave the index the biggest lift with
Anglo American <AAL.L>, BHP Billiton <BLT.L>, and Rio Tinto
<RIO.L> up between 3.3 and 5.9 percent as copper, nickel and
zinc prices were all in positive territory.
Analysts were cautiously optimistic that the rally is
sustainable.
"There seems to be a general consensus it could potentially
run for the next couple of weeks," said Richard Hunter, head of
UK equities Hargreaves Lansdown.
Embattled banks were in the red after Britain's Financial
Services Authority said late on Monday that its ban on
short-selling financial stocks would expire on Jan. 16, but that
it would reintroduce the ban without consultation if needed.
Barclays <BARC.L> Royal Bank of Scotland <RBS.L>, Lloyds TSB
<LLOY.L> and HSBC <HSBA.L> fell between 0.3 and 3.8 percent.
The FSA also said it would extend rules requiring net short
positions in financial stocks to be disclosed until June 30,
although disclosure will only be required at 0.1 percent bands.
[]
Bucking the trend in the financial sector, Man Group <EMG.L>
was the strongest riser in the blue-chip index, gaining 14.5
percent after the fund manager said its Athena Guaranteed
Futures NAV rose 24.9 percent on the year prompting Evolution
Securities to repeat its "buy" rating [].
SINKING FEELING
British consumer morale sank in December as worries about
job losses resulting from the downturn intensified, with the
Nationwide Building Society saying its confidence gauge fell to
its lowest since the survey began in 2004. []
The UK's largest building society also reported that British
house prices fell another 2.5 percent in December to make 2008
their worst-performing year on record. []
However retailers Next <NXT.L> and FTSE 250-listed Debenhams
<DEB.L> gained 10.7 and 25.4 percent respectively despite
posting falling sales, as investors were relieved that the slide
was not greater.
Other high-profile retailers including Marks & Spencer
<MKS.L> and Sainsbury's <SBRY.L> are reporting later in the
week.
"There are still a number of hurdles for the market to
consider," Hunter at Hargreaves Lansdown said. "We will have
other retailers reporting on their Christmas experience in the
next few days."
Marks & Spencer gained 4.6 percent after the Times website
reported that it is set to cut more than 1,000 jobs in stores,
its head office and support functions following disastrous
Christmas trading.
A spokeswoman for M&S declined to comment. []
However oil producers BP <BP.L> and Royal Dutch Shell
<RDSa.L> both fell 0.4 despite crude approaching $50 per barrel
<CLc1> on geopolitical worries [].
Investors are keenly awaiting an interest rate decision from
the Bank of England on Thursday. Analysts polled by Reuters
forecast that the Monetary Policy Committee will opt to cut
rates by 50 basis points 1.5 percent.
Investors will also look to U.S. data for clues on the
health of the global economy.
"Traders will also be paying close attention to the release
of the US ISM non-manufacturing numbers (for December at 1500
GMT), which should give as a hint at how the industry is doing,"
David Evans at Betonmarkets.com said.
(Additional reporting by Phakamisa Ndzamela; Editing by Hans
Peters)
