Economic data boosts FTSE 100 to 8 week closing high

Thu Jul 18, 2013 11:57am EDT

* FTSE up 62.43 points at 6,634.36

* Dow Jones hits all-time intraday high after data

* UK retail sales data helps lift consumer-focused stocks

* UK banks rally after Morgan Stanley report rise in profits

* WPP boost by bullish Publicis update

By David Brett

LONDON, July 18 (Reuters) - UK equities rallied firmly into the close on Thursday as bullish economic data in Britain and the U.S. calmed fears that the global economy may not be ready for a wind down in stimulus.

The FTSE 100 closed up 62.43 points, or 1 percent at 6,634.36 on Thursday, its highest close since May 30, while Wall Street's Dow registered a new historical intraday high.

The catalyst for the late gains was the improved U.S. weekly jobless claims data and an above-forecast reading on business sentiment in the U.S. Mid-Atlantic region.

That helped power UK stocks, which continue to recover from mid-June lows triggered by worries a slowdown in stimulus in the U.S. would derail the global economic recovery.

"At the moment, over exuberance springs to mind with the FTSE 100 on the right side of the 6,600 level and the Dow in virgin territory," TradeNext strategist Ronnie Chopra said.

"However, for tapering to be delayed obviously we need bad data but at the moment both bad and good data seems to push the equity markets higher," he said.

Consumer-focused stocks such as general retailers and the travel and leisure sector each rose 1.8 percent after Retail sales increased 0.2 percent on the month and 2.2 percent on the year, adding to signs of a recovery in the British economy.

Optimism among consumers appeared to be spreading to equity investors with the London Stock Exchange, up 7.4 percent, after first quarter revenues beat forecasts.

More upbeat numbers from U.S. banks, this time Morgan Stanley, helped boost senitment among heavyweight UK banking shares, which closed at their highest levell since May 22.

The world's biggest advertising agency, FTSE heavyweight WPP , gained 3.6 percent. Traders said the share benefited from news French peer Publicis was targeting the top end of organic growth forecasts.

In the very early stages of the European quarterly earnings season, 61 percent of companies have beaten expectations, by an average of 4.2 percent.

Low-cost airline easyJet climbed 4.1 percent, the second top riser on FTSE 100, after an upgrade by JP Morgan, which said it favoured discount airlines over more established names on profitability grounds. (Reporting by David Brett; editing by Ron Askew)

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