By Michael Taylor
LONDON, May 2 (Reuters) - Britain's main share index rose
almost 1 percent by midday on Friday, buoyed by banking and
mining sectors, and volumes remained low ahead of U.S. jobs
data.
At 1039 GMT, the FTSE 100 <> was up 51.7 points, or 0.9
percent, at 6,139.0. The UK benchmark index gained 6.8 percent
in April, its best monthly performance in five years.
Among gainers on Friday, Rio Tinto <RIO.L>, which has
rejected a bid from rival BHP Billiton <BLT.L>, climbed 0.8
percent after the company's Chairman Paul Skinner was quoted by
the Sydney Morning Herald as saying that a break-up of Rio Tinto
was an option to extract the best possible return for
shareholders. []
BHP advanced 1.2 percent, while Kazakhmys <KAZ.L>, Lonmin
<LMI.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L> and Eurasian
Natural Resources <ENRC.L> were up 1.3 to 3.3 percent.
U.S. stocks rose overnight as a rebound in the dollar and
retreating oil prices calmed fears about inflation. In Asia,
Japan's Nikkei average <> rose 2.1 percent.
Investors will focus on the U.S. non-farm payrolls data due
at 1230 GMT for further clues on the state of the world's
largest economy. Economists in a Reuters survey forecast 80,000
jobs were lost in April, a repeat of the March figure.
"We have to be quite cautious ahead of the non-farms," said
Mark Priest, a senior trader at TradIndex. "Part of all this
recession and concerns over the economy, employment is key
factor and if they come in weaker or stronger than expected, we
will see markets shoot one way or another."
Banks were another standout sector, with Royal Bank of
Scotland, HBOS <HBOS.L>, Lloyds TSB <LLOY.L>, Alliance &
Leicester <ALLL.L>, Standard Chartered <STAN.L> and Barclays
<BARC.L> rising between 1 and 2.8 percent.
The Daily Telegraph said Texas Pacific Group was poised to
bid for RBS' insurance arm. RBS said last month it would
consider selling off all or part of its insurance arm as part of
efforts to strengthen its capital ratios.
Insurers were also in demand. The Financial Times said
Germany's Allianz <ALVG.DE> could make a big acquisition in the
UK general insurance market and was gearing up for a possible
assault on UK life assurance by importing U.S.-style retirement
savings products to Britain. Allianz was not immediately
available for comment.
Aviva <AV.L>, Standard Life <SL.L>, Prudential <PRU.L> and
Friends Provident <FP.L> and Admiral <ADML.L> were up 2.3 to 4.1
percent.
Retailers also supported the index, with Next <NXT.L> and
Marks & Spencer <MKS.L> riding high on a bear squeeze, traders
said.
"The volumes aren't good. It's a long bank holiday weekend,"
said one London trader in retailers. "Whether we get a dose of
reality with the payrolls this afternoon I don't know but there
is a lack of volume here."
Building materials distributor Wolseley <WOS.L>, which earns
half of its revenue in North America, rebounded 4.1 percent
after a recent battering.
John Wood Group <WG.L> and British Energy <BGY.L>, however,
were down.
Shares in Cadbury Plc <CBRY.L> fell 1 percent on their first
day of trading as a standalone confectionery group, undermined
by the prospects for its soon-to-be spun off North American Dr
Pepper drinks arm.
(Additional reporting by Dominic Lau; Editing by Erica
Billingham)
