Broad-based rally helps Britain's FTSE rebound from 2-month lows
* FTSE 100 up 0.4 percent
* Defensives lead market up, continuing pattern of year
* Miners rally from eight-month lows
* FTSE to hit 7,000 by year-end - Citi
LONDON, April 8 (Reuters) - Britain's top share index rose on Monday, bouncing back from two-month lows set in the previous session, with every sector contributing to the gain as investors snapped up beaten-down stocks.
Consumer staples were the heavyweight gainers, adding 8.6 points to the index and maintaining a trend this year of defensive stocks, usually resilient to the whims of the economic cycle, outperforming in rising markets.
Appetite for the cyclical mining sector was also strong, buoyed by rising metal prices, and it gained 0.8 percent to rebound from eight-month lows set last session.
Miners usually lead risers in market rallies, but they have fallen 13 percent so far this year compared with a 6.4 percent rise on the broader index. The fall has seen the sector erase all the gains it made after European Central Bank chief Mario Draghi's pledge last July to do "whatever it takes" to save the euro.
Leading the gainers across the whole index was Eurasian Natural Resources Corporation, with the miner up 3.7 percent, having surged by as much as 9 percent, after an upgrade to "neutral" from "sell" by Citi. The volatile stock had been down 14.5 percent on the year at the end of last week.
"Metal prices have been pretty stable in the last week, and if you look at some of the miners, could I be buying them here? Yes, but I wouldn't be putting my entire portfolio into it," said Nick Xanders, who heads European equity strategy at BTIG.
"The risks to the cyclicals side are to the downside in terms of earnings, while the defensives have had massive outperformance. When telcos and utilities are the outperformers year to date, that's not a healthy rally if you're bullish."
At 0819 GMT, the FTSE 100 index was up 23.72 points, or 0.4 percent, at 6,273.50, having shed 1.5 percent on Friday in its worst session in two months after disappointing U.S. jobs data.
Supportive monetary policy by central banks globally has seen investors "buy the dips" in equity markets despite ongoing economic uncertainty.
Strategists at Citigroup expect 10 percent gains for European stocks by the end of 2013, advising investors to stay long despite macro risks, and anticipate the FTSE 100 to finish the year at 7,000.
However, Citi's top picks are "defensive growth" stocks such as food and beverage and healthcare, indicating that they expect defensive outperformance to continue.
Despite this constructive long-term outlook on equities, the FTSE has traded sideways since the end of January, and some see poor economic data in Europe and the United States as too substantial to look through in the nearer term.
Disappointing U.S. non-farm payrolls data helped take the FTSE 100 below 6,300 for the first time since February on Friday, and some see this as the beginning of a longer-term correction in stock markets.
"The uncanny similarity to the Q1-to-Q2 slowdown in data and equity markets of the past three years does indeed raise the risk of a correction," Jan Loeys, analyst at JP Morgan said in a note.
(Additional reporting by David Brett; Editing by Pravin Char)
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