Oils, miners pull FTSE 100 up 2.2 percent
* Commodity stocks fuelled by oil price rise * Marks & Spencer up on trading news
By Tricia Wright
LONDON, July 1 (Reuters) - London's top share index closed 2.2 percent higher on Wednesday, fuelled by a rise in the oil price which prompted a strong rally in commodity stocks, and on hopes that the recession may be drawing to a close.
The FTSE 100 .FTSE was up 91.50 points at 4,340.71, after closing 1 percent lower on Tuesday.
The index has gained 25.4 percent since touching a six-year low in March, but is still down 2.1 percent for the year.
"When (the oil price) rallies, I think people begin to get a little bit confident that demand is growing and therefore hopefully (global) economies are going to start turning around, and that's why we're seeing the rally in the markets," said Mark Priest, senior equities trader at ETX Capital.
Oil majors added the most points to the FTSE 100 index, holding on to gains despite crude prices CLc1 reversing earlier gains and falling below $70 a barrel after U.S. government data showed increases in U.S. fuel inventories.
BP (BP.L), Royal Dutch Shell (RDSa.L), BG Group (BG.L), Tullow Oil (TLW.L) and Cairn Energy (CNE.L) rose between 0.4 and 4.2 percent.
Miners rose in sympathy, with Eurasian Natural Resources (ENRC.L), Antofagasta (ANTO.L), Xstrata (XTA.L), Kazakhmys (KAZ.L) and BHP Billiton (BLT.L) adding 4.5-6.3 percent, amid metal price strength.
Vedanta Resources (VED.L) was the biggest blue-chip riser, up 9.9 percent, after news the India-focused mining group has boosted the size of its share buy-back programme by 40 percent to $350 million.
Hopes that Britain's economy is emerging from recession got a boost on Wednesday from data which showed less of a decline in services and manufacturing activity, though doubts remain about the durability of any recovery. [ID:nL1191245]
U.S. manufacturing mustered its highest level of activity in nearly a year in June but unexpected weakness in private sector employment signalled how slow an economic recovery might be, reports released on Wednesday showed.
International Power (IPR.L) grabbed the second spot on the FTSE 100 leaderboard, up 6.6 percent after news the British utility is selling its Czech business to the Czech-Slovak investment firm J&T Group for 581 million pounds ($955 million) after costs, helping calm worries over its debt. [ID:nNL1476133]
Elsewhere, Marks & Spencer (MKS.L) added 3.8 percent as analysts nudged up their full-year profit forecasts for the high street retailer after it posted a smaller than expected decline in first-quarter underlying sales. [ID:nLU57554]
Peer Next (NXT.L) was also firmer, climbing 3.9 percent.
Banks were broadly higher, as the risk sensitive stocks responded well to increased investor confidence.
Barclays (BARC.L), HSBC (HSBA.L), Standard Chartered (STAN.L) and Royal Bank of Scotland (RBS.L) rose 1.4-3.5 percent.
On the downside, Man Group (EMG.L) shed 5.6 percent after going ex-dividend. (Editing by David Cowell)
