FTSE hits 4-mth closing high; oils, pubs jump

By Michael Taylor

LONDON, May 7 (Reuters) - Britain's leading shares ended up almost 1 percent on Wednesday as record high crude prices lifted the oil sector, while Enterprise Inns (ETI.L: Quote, Profile, Research, Stock Buzz) led individual stocks higher. The FTSE 100 .FTSE ended up 45.8 points, or 0.7 percent at 6,261.0 -- its highest closing level in four months. But the UK's blue-chip index is still down 3 percent for the year.

Strong crude prices CLc1 helped pump heavyweight oil shares higher, with BP (BP.L: Quote, Profile, Research, Stock Buzz) and Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) up between 1.3 and 1.4 percent. Also supporting stocks, sterling fell to an 11-week low against the dollar.

On the macro front, the Bank of England began a two-day meeting and will announce its interest-rate verdict at 1100 GMT on Thursday.

Hopes for a surprise rate cut drove banks higher, with Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) and Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) up 0.3-2.4 percent. Shares in HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) rose 3.9 percent after Goldman Sachs trimmed its estimates after the mortgage bank's 4 billion pound rights issue but confirmed a "buy" rating.

"The bears have been huffing and puffing, but so far this rally refuses to be blown down," said one London trader. "European stocks have been on the advance today mainly as a result of the positive rally into the close in the U.S. overnight."

Forecast-beating U.S. non-farm productivity data [ID:nN07561804] also boosted risk appetite and equity markets across the board.

Enterprise Inns (ETI.L: Quote, Profile, Research, Stock Buzz) soared nearly 30 percent after it got the green light from the British government to convert to a tax-efficient property status, in a move expected to drastically change the way pub firms are structured. [ETI.L-RTRS-LEN]

In related shares, Punch Taverns (PUB.L: Quote, Profile, Research, Stock Buzz), Marston's (MARS.L: Quote, Profile, Research, Stock Buzz) and Mitchells & Butlers (MAB.L: Quote, Profile, Research, Stock Buzz) rose 4.7 to 17.3 percent to extend earlier gains after positive broker comment and an update from Restaurant Group (RTN.L: Quote, Profile, Research, Stock Buzz) had sent shares higher.