FTSE ends up 0.7 pct, buoyed by banks, commods
* Higher commodity prices boost miners, oils
* Banks rise; Thomas Cook sinks
By Dominic Lau
LONDON, June 10 (Reuters) - Britain's blue chip index ended 0.7 percent higher on Wednesday, driven by gains in mining and energy stocks, while banks rose on growing investor confidence.
The FTSE 100 .FTSE closed 31.96 points higher at 4,436.75, paring earlier gains to as high as 4,505.89, as weaker U.S. stocks dampened the mood. Volumes on the UK benchmark were at about 90 percent of the index's 90-day average daily volume.
Miners added the most points to the index, lifted by a 8.1-percent rise in Eurasian Natural Resources (ENRC.L) after it said prices may rise for its most profitable product, ferrochrome.
Antofagasta (ANTO.L) put on 4.6 percent after the Chilean copper miner said it was on track with expansion plans under which output will jump 60 percent by 2011.
Within the sector, Vedanta Resources (VED.L), Kazakhmys (KAZ.L), Rio Tinto (RIO.L), BHP Billiton (BLT.L) and Xstrata (XTA.L) surged 2.6 percent to 8.5 percent.
"The market looked very strong in the open. It looked like it was going to have a very good attempt to breach 4,500 and push on higher," said Angus Campbell, head of sales at Capital Spreads.
"But the FTSE 100 continues to struggle at 4,500 for the fifth times in as many weeks. From a technical point of view, it's not an encouraging sign."
Oil producers, supported by crude which traded above $70 a barrel, were also in demand but pared gains in late trading.
BP (BP.L), Royal Dutch Shell (RDSa.L) and Cairn Energy (CNE.L) rose between 0.4 and 0.8 percent, while BG Group (BG.L) and Tullow Oil (TLW.L) lost 0.7 and 1.6 percent, respectively.
Banks were generaly higher, boosted by overnight news that top U.S. banks have been cleared to repay state aid, freeing them from restrictions on executive compensation, dividend payments and share purchases once they buy back their preferred shares from the U.S. government.
HSBC (HSBA.L), Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L) advanced 3.2 percent to 5 percent. Barclays (BARC.L) and Standard Chartered (STAN.L), however, slipped 0.5 and 0.6 percent, respectively.
Man Group (EMG.L) eaesd 2.2 percent after the hedge fund group said the net asset value of its main AHL fund lost 2.6 percent last week.
CAUTIOUS ON OUTLOOK
Policymakers and executives remained cautious on the economic outlook, while data presented a mix picture.
Bank of England policymaker Kate Barker was quoted as saying on the Leicester Mercury newspaper's website that British interest rates could stay low for some time and it is still not clear whether the pick-up in the economy will prove durable.
Goldman Sachs (GS.N) CEO Lloyd Blankfein said he believed the current upturn in world markets was probably not a full recovery from crisis and expected a long recession. [ID:nLA1039541]
On the economic front, UK industrial output rose unexpectedly in April for the first time in more than a year, and the National Institute of Economic and Social Research said the British economy grew in April for the first time in just under a year and continued its expansion in May. But trade gap in April was wider than forecast at 7 billion pounds.
The U.S. trade gap also widened in April as exports weakened again in a reflection of waning global demand [ID:nN10431427], while Japan's core private-sector machinery orders slid unexpectedly in April [ID:nT134095].
On the downside, Thomas Cook (TCG.L) fell 7.1 percent, after gaining 10 percent in the previous session. The travel group said on Tuesday that it had not had an approach in relation to the acquisition of Arcandor's (AROG.DE) 53 percent stake or a potential offer for the company.
Cruise operator Carnival (CCL.L) shed 3 percent, hurt by a price target cut from Morgan Stanley.
Defensive stocks were also down, with Vodafone (VOD.L), AstraZeneca (AZN.L), GlaxoSmithKline (GSK.L) and Shire (SHP.L) losing 0.3 percent to 2.1 percent. (Editing by Hans Peters)
