* FTSE 100 up 0.2 percent
* Barclays, RBS lead banks higher after ICB report
* BHP Billiton helped by Credit Suisse upgrade
By Tricia Wright
LONDON, April 11 (Reuters) - Britain's top shares rose on
Monday, with banks firmer on relief about a report from the
Independent Commission on Banking, but some investors were wary
as the index nears peak levels ahead of corporate earnings.
By 1058 GMT, the FTSE 100 <> was up 10.61 points, or
0.2 percent, at 6,066.36, retreating from its highest closing
level since mid-February on Friday, when it firmed 0.8 percent
to end at 6,055.75.
Observers said bullish momentum could begin to slow, with
inflationary concerns preying on investors' minds ahead of
upcoming corporate earnings.
"The 6,100 (level) should continue to act as a significant
resistance level in the short term and with earnings season
beginning in earnest expectations will be on future guidance as
opposed to profit levels for the previous quarter," Michael
Hewson, market analyst at CMC Markets, said.
"I think there is an element of caution about future
guidance levels and investors will be paying particular
attention to this, in the face of rising global interest rates
and inflationary pressures," he said.
The second-quarter earnings season kicks off with results
from Dow component Alcoa Inc <AA.N> which reports after the U.S.
market close on Monday.
BANKS BUOYANT
Banks firmed on relief after recommendations in a report by
the UK's Independent Commission on Banking were not as severe as
many had feared. Barclays <BARC.L> and Royal Bank of Scotland
<RBS.L> rose 3.2 and 2.1 percent respectively, with some
analysts saying they did best from the report. []
The ICB recommended that banks should form separate
subsidiaries for retail and trading operations, helping protect
ordinary savers.
Espirito Santo said that, relative to expectations, the
universal banks such as Barclays and RBS fared the best from the
report as retail banking ring-fencing looks less onerous than it
could have been.
The broker said Lloyds Banking Group <LLOY.L>, which managed
a 0.1-percent rise, fared "somewhat negatively, with the
unquantified prospect of further branch divestitures."
Miners firmed as gold hit record highs and silver a 31-year
peak, lifted by elevated oil prices and a weaker dollar, with
sentiment surrounding the sector also aided by stronger than
expected trade data from top consumer China.
BHP Billiton <BLT.L> was the top sector performer, climbing
2.2 percent, boosted as Credit Suisse lifted its rating on the
stock to "outperform" from "neutral", reflecting a cheap
valuation and strong earnings momentum from oil and bulks.
BHP played down speculation it was in talks to acquire a
cornerstone stake that could be worth $10.3 billion (A$9.8
billion) in Australia's largest oil and gas firm, Woodside
Petroleum <WPL.AX>, from Royal Dutch Shell <RDSa.L>.
Nomura, in a note, said it remains of the view that M&A
activity will provide a positive catalyst for European equities
in 2011 against a supportive fundamental backdrop, citing low
interest rates, strong balance sheets and low equity multiples.
Among individual movers, GKN <GKN.L> climbed 2.2 percent
after the plane and car parts maker issued a strong
first-quarter trading update, prompting Investec Securities to
repeat its "buy" rating on the stock.
(Editing by Jon Loades-Carter)
