UK's FTSE gains as property market pick-up lifts sentiment
* FTSE 100 up 0.5 pct, Glaxo, insurers help lift market
* Sentiment boosted by fresh signs of UK property pick-up
By Sudip Kar-Gupta
LONDON, Aug 13 (Reuters) - Gains in healthcare group GlaxoSmithKline and further signs of a pick-up in the UK housing sector helped lift Britain's benchmark equity index on Tuesday.
By mid-session trade, the blue-chip FTSE 100 index, which has retreated from a 13-year high reached in May, was up by 0.5 percent, or 32.07 points, at 6,606.41 points.
Glaxo jumped 1.3 percent, adding the most points to the FTSE 100, after winning U.S. regulatory approval for a drug to treat the most common strain of HIV, the virus that causes the AIDS disease.
Traders said an industry survey from the Royal Institution of Chartered Surveyors (RICS) showing that UK house prices were rising at their fastest pace in seven years lifted overall investor sentiment.
The data added to recent signs that the UK economy is gaining strength and helped push the FTSE 250 mid-cap index back towards record levels reached earlier this month.
Mid-cap companies are more exposed to the domestic economy than their more international blue chip peers and the FTSE 250 was up 0.6 percent by the mid-session.
Resurgent property prices have fuelled concerns about rising inflation, but other traders said it would buoy UK stocks closely linked to the domestic economy since the confidence of many British consumers is tied to their house prices.
"The signs of the resurgent housing market are continuing to grow," said Gerard Lane, UK equity strategist at Shore Capital.
UK banks, builders and retailers would benefit most from the improving housing market, he said.
"Overall, the data today supports our thesis that those companies with a high degree of exposure to the pick-up in the domestic economy could be expected to benefit the most from the housing market pick-up," he said.
Insurance stocks were also on the rise, boosted by better-than-expected interim profits from UK life insurance group Resolution. Resolution shares rose 3 percent after its earnings report in which it maintained its dividend.
"Dividend yields and corporate earnings are OK, and we should see a small drift up," said APS Alpha technical strategist Adrian Slack. (Additional reporting by David Brett; Editing by Susan Fenton)
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