FTSE gains 2% as upbeat data boosts commods, banks

* Miners, oils boosted by gains in commodity prices

* Financials lifted by upbeat data

* Sterling hits highest level since November vs dollar

By Jon Hopkins

LONDON, June 1 (Reuters) - London's leading share index ended 2 percent higher on Tuesday as a batch of upbeat data saw optimism about the global economy rise, boosting heavyweight oils, miners, and financial stocks.

The FTSE 100 .FTSE closed up 88.25 points at 4,506.19, its highest close since early January. The benchmark index rose 4.1 percent in May -- its third monthly rise in a row and the longest winning streak in two years.

U.S. stocks extended gains on Monday, with the three major indexes up 2.4-2.7 percent, after better-than-expected May U.S. ISM manufacturing data sparked optimism the economy may have seen its worst days.

"The economic crisis is still very real but, there are ever increasing signs of a recovery from the world's biggest economy," said David Evans, market analyst at BetOnMarkets.com.

"Like a fairground ride, the rollercoaster has completed its worst loops and gut wrenching turns and appears to be slowing down towards the end of the ride. At least that is what investors are hoping is happening," said Evans.

Mining stocks led the charge in London, as metals prices firmed, bolstered by hopes for increased demand particularly following bullish Chinese data.

China's official purchasing managers index for May stayed above 50, the level which separates contraction from expansion, for a third straight month. "Any kind of improvement in the export and import business of the United States or Europe is going to come as a result of China," said David Buik, senior partner at BGC Partners of the Chinese PMI data. "Any positive economic data that comes out of China has to be very, very positive."

Xstrata (XTA.L), Vedanta Resources (VED.L), Anglo American (AAL.L), Lonmin (LMI.L), BHP Billiton (BLT.L), and Rio Tinto (RIO.L) gained 5.3-9.0 percent.

British data also showed signs the economic slump may be easing. Britain's manufacturing sector contracted at its slowest pace in a year in May although the market was expecting a healthier reading. [ID:nL1488357]

Crude oil prices CLc1 pushed past $67 per barrel to a seven-month high, sending shares in BP (BP.L), Royal Dutch Shell (RDSa)L> and BG Group (BG.L) up 1.7-2.7 percent.

FINANCIALS FANCIED

Banks rallied after recent falls, with Barclays (BARC.L), Royal Bank of Scotland (RBS.L), Standard Chartered (STAN.L), and Lloyds Banking Group (LLOY.L) up 1.0-6.6 percent.

But HSBC (HSBA.L) missed out, losing 0.8 percent. The Saudi central bank has ordered domestic lenders to freeze bank accounts of businessman Maan al-Sanea, one of the country's wealthiest businessmen and recently a big shareholder in HSBC, three Saudi-based bankers said on condition of anonymity. [ID:nLV384041]

Mid-cap housebuilder Berkeley Group (BKGH.L), in which Al-Sanea holds a stake of 28.8 percent, dropped 2.3 percent while all the rest of the sector gained.

Life insurers and other financials rose, with Legal & General (LGEN.L) up 7.8 percent, Old Mutual OLML.L ahead 7.0 percent, and Man Group (EMG.L) up 5.9 percent.

Non-life insurers were weak, however, with blue chip Amlin (AML.L) and mid-cap peers Catlin (CGL.L) and Novae Group (NVA.L) down 2.0-5.6 percent as Numis downgraded all three stocks in a sector review, cutting estimates and targets across the board due to the impact of dollar weakness on U.S. profit.

Sterling climbed to its strongest level since early November against the dollar GBP= as investors become more comfortable holdings assets perceived as riskier.

Defensive issues were unwanted as investors' risk appetite returned, with gas distributor Centrica (CNA.L) the top FTSE 100 faller, down 3.5 percent, while power generator Drax (DRX.L) lost 1.8 percent, contract caterer Compass Group (CPG.L) fell 2.2 percent, and food retailer Tesco (TSCO.L) off 1.5 percent. (Additional reporting by Catherine Bosley; editing by Dan Lalor)