Britain's FTSE gains, fuelled by Fed reassurances
* FTSE 100 rises 1.3 percent
* Fed officials reiterate accommodative stance
* WPP, Smiths Group fuelled by upgrades
* Banks underperform after EU deal
By Alistair Smout
LONDON, June 27 (Reuters) - Britain's top share index rose on Thursday after several U.S. central bankers offered reassuring comments about their stimulus programme, helping the market further off six-month lows.
The FTSE 100 closed up 77.92 points, or 1.3 percent, at 6,243.40, with only nine stocks in negative territory.
The index extended modest morning gains in afternoon trade, as encouraging data from the United States and comments from Federal Reserve officials helped lift U.S. stocks.
Two voting members of the Fed said policy was likely to remain accommodative and played down Chairman Ben Bernanke's comments that stimulus withdrawal could happen later this year.
"The return to markets going positive this week is simply because markets overreacted to the initial comments from Bernanke, as if quantitative easing was ending in September. It isn't, and the rhetoric from other Fed members has said exactly that," said Lorne Baring, managing director of B Capital.
The FTSE 100 had tumbled 16 percent in a month to its lowest levels since January after Bernanke first hinted that stimulus might be withdrawn this year, but is up 2.1 percent this week.
Baring said he owned the FTSE 100 because of its global exposure and the possibility of further monetary support once new Bank of England governor Mark Carney takes up his post.
That global exposure was evident in the performance of miners, who gained 1.2 percent to bounce of off four-year lows, helped by a recovery in metals prices.
The top gainer in the FTSE 100 was WPP, the world's biggest advertising agency, up 4.5 percent after being added to Bank of America/Merill Lynch's "most wanted" list.
Positive broker comment also helped Smiths Group, up 3.8 percent with traders citing a UBS upgrade of the stock to "buy" from "neutral" as being behind the move.
Banks underperformed after the European Union agreed on how to share the costs of future bank failures among investors and wealthy savers, with Royal Bank of Scotland and Barclays down 1.6 percent and 0.9 percent respectively.
"As part of the deal the implementation of a deposit levy is also likely to raise banks' costs and thus impact profitability which has pushed prices lower," Michael Hewson, senior analyst at CMC Markets, said in a trading note. (Editing by Catherine Evans)
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