FTSE hits 2-week closing high on commods, results

* FTSE closes 0.9 percent higher; gains for 2nd session

* Commodities advance; China tightening concerns wane

* Banks mixed on levy fears; UK coalition cabinet meets

By David Brett

LONDON, May 13 (Reuters) - Britain's top stock index hit a two-week closing high on Thursday as miners gained, tracking stronger metals prices, but persistent concerns about euro zone debt problems prompted investors to stay cautious.

The FTSE 100 .FTSE ended up 50.28 points, or 0.9 percent, at 5,433.73 -- the highest close since April 30. The blue chip index has gained around 6 percent so far this week, recovering most of last week's 7.7 percent fall.

Miners rallied along with stronger metal prices, with key base metals prices rising 0.9 to 3.5 percent. Eurasian Natural Resources (ENRC.L), Fresnillo (FRES.L) and BHP Billiton (BLT.L) added 3.2 to 3.8 percent.

Gold hovered near its all-time high, helping gold miner Randgold Resources (RRS.L) to add 1.8 percent.

The sector .FTNMX1770 remains almost 14 percent off 2010 highs hit in late March, as concerns over potential China monetary tightening and euro zone debt issues have weighed on demand.

"Sentiment remains fairly fragile with concerns about sovereign risk never far away from the markets gaze," said Michael Hewson, an analyst at CMC Markets.

Investors were relieved by measures from Portugal and Spain to trim their budget deficits, offering reassurance the euro zone was addressing deep-rooted fiscal problems. [ID:nLDE64B0SK]

Energy shares also rebounded with Royal Dutch Shell (RDSa.L) and BG Group (BG.L) up 1.1 and 0.4 percent respectively.

BP (BP.L) rose 1.1 percent as the energy giant moved forward with untested solutions aimed at containing the spreading oil spill from a ruptured well in the Gulf of Mexico. [ID:nN12184598]

UPBEAT RESULTS

Bullish results from Britain's leading corporates helped improve sentiment. BT Group (BT.L) jumped 10.8 percent after full-year results beat market expectations. [ID:nLDE64523R]

Private equity group 3i Group (III.L) rose 7.6 percent after the value of its portfolio rose 15 percent last year.

Insurer Old Mutual (OML.L) added 1.6 percent after an upbeat first-quarter trading update and with continuing speculation over Standard Chartered's (STAN.L) interest in its 54 percent stake in South Africa's Nedbank (NEDJ.J).

Sainsbury (SBRY.L) put on 3.2 percent after Britain's No.3 grocer full-year profits beat forecasts. [ID:nLDE64C05G]

Banks were mixed as investors speculated on what impact there would be from potential measures levied on the sector by the new UK coalition government.

HSBC (HSBA.L) and Standard Chartered (STAN.L) fell 0.2 and 0.7 percent respectively. Sentiment was also strained as French lender Credit Agricole (CAGR.PA) missed first-quarter profit forecasts.

But UK state-backed Lloyds Banking Group (LLOY.L) and Royal Bank of Scotland (RBS.L) climbed 1.8 and 1.6 percent respectively, after Wednesday's declines.

The market kept a close eye on the new British government, with Prime Minister David Cameron holding his first cabinet meeting on Thursday.

Reducing Britain's record budget deficit of over 11 percent of national output will be the first test of the relationship between the centre-right Conservatives and smaller centrist Liberal Democrats. [ID:nLDE64C090]

The economic data from the United States was mixed. The number of U.S. workers filing for jobless benefits fell only slightly last week, highlighting the challenges facing the labour market.

Meanwhile, U.S. import prices pointed to tame inflation, according to government data, easing any concerns that the Federal Reserve would need to raise interest rates anytime soon. [ID:nN13129786] (Editing by Karen Foster)