FTSE hits 6-week closing high; banks lead
LONDON (Reuters) - Britain's top share index hit a six-week closing high on Tuesday and rose for a third straight session, led by banks with HSBC (HSBA.L) firmer after the previous session's post results sell-off.
The FTSE 100 .FTSE closed up 78.12 points, or 1.45 percent, at 5,484.06, its highest closing level since January 19, after climbing 1 percent on Monday.
"The markets seem to have had their correction from the January highs," said Angus Campbell, head of sales at Capital Spreads.
"We've absorbed the bad news now and investors can focus back again on earnings."
Banks were in demand, with HSBC recovering 2.7 percent after its sharp fall on Monday which followed below-forecast results.
Standard Chartered (STAN.L), set to post full-year numbers on Wednesday, put on 4.2 percent, while Royal Bank of Scotland (RBS.L), Lloyds Banking Group (LLOY.L) and Barclays (BARC.L) gained 2.3-3.1 percent.
Miners rose, bolstered by firmer metals prices and a bullish review from Nomura, which raised targets across the sector.
Mexican silver miner Fresnillo (FRES.L) stood out, gaining 4.5 percent after posting a forecast-beating 141 percent rise in 2009 profit on higher prices and stronger output.
Anglo American (AAL.L), Rio Tinto (RIO.L), BHP Billiton (BLT.L) and Antofagasta (ANTO.L) added 1.9-2.8 percent.
But Vedanta Resources (VED.L) missed out, shedding 3.3 percent after launching a $775 million convertible bond issue.
As the crude price rose, oil majors also provided support for the blue chips, spearheaded by Tullow Oil (TLW.L), up 2.7 percent with traders citing market talk that BP (BP.L) was planning a 15 pounds per share bid. BP, which rose 0.7 percent, and Tullow declined comment.
Royal Dutch Shell (RDSa.L), BG Group (BG.L), Cairn Energy (CNE.L) added 1.6-2.1 percent.
BA TOP RISER
Among individual gainers, British Airways BAY.L was the top FTSE 100 riser, up 6.2 percent following positive results from fellow carriers Continental Airlines CAL.N and Lufthansa (LHAG.DE), while an industry body said the recovery in global demand for air traffic was gathering pace.
Chipmaker ARM Holdings (ARM.L) also saw good support, ahead 4.3 percent supported by an upbeat outlook statement from SanDisk (SNDK.O) and by a bullish note on the sector from UBS.
Life insurer Prudential (PRU.L) was the biggest blue-chip loser, down 8 percent, extending Monday's falls following its move to buy American International Group's (AIG.N) Asian arm for $35.5 billion, funded by a $21 billion rights issue.
Motor insurer Admiral Group (ADML.L) was also under pressure, down 3.3 percent after in-line full-year results failed to excite, with KBC Peel Hunt prompted to cut its rating to "hold" from "buy.
Sterling fell on Tuesday as the prospect of a hung parliament continued to pressure the currency, though it stayed above a ten-month low against the dollar hit the previous day.
Polls over the weekend suggested Gordon Brown's ruling Labour party may just hang on for another term, as the opposition Conservatives saw their lead cut back, with neither looking likely to secure a parliamentary majority.
(Editing by Elaine Hardcastle)
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