* FTSE 100 index adds 1 percent
* Barclays adds 8.6 percent to hit two-year highs
* Resistance at 6,300 broken, seen as support for future
* Reckitt Benckiser rallies in late trade on Lat Am deal
By Alistair Smout
LONDON, Feb 12 A surge in Barclays' shares led
Britain's benchmark index past the psychologically important
6,300 level on Tuesday, as the blue chip bank's planned overhaul
raised hopes for the troubled sector's revival.
Barclays gained 8.4 percent, leading FTSE 100
gainers and adding over 12 points to the index alone,
after unveiling plans to slash annual costs by up to 2 billion
pounds ($3 billion).
The bank plans to prune its investment bank and axe at least
3,700 jobs. It also raised its dividend and reported a 26
percent rise in adjusted pretax profit for 2012.
"They're not going to change things overnight - it's a huge
overhaul. But they are taking things on board and pushing them
in the right direction," said Richard Curr, head of dealing at
Prime Markets, adding that technical factors supported Barclays'
"We were looking for a firm break of the (January) high at
307p, and once it got up to 310p by mid-morning, it was clear
that it was breaking out."
The stock hit 325p for the first time since February 2011,
and was the most heavily traded stock in the index, trading over
three times its 90-day average volume.
Lloyds and Royal Bank of Scotland were the
second and third biggest gainers, rising 5.1 percent and 4.1
percent respectively, with traders citing the implications of
the Barclays news for a sector seeking to reassure investors
after years of crisis.
The FTSE 100 closed up 61.32 points, or 1 percent higher, at
6,338.38 points, with banks alone adding over 27 points to the
The day was the index's best session since the start of the
month, with banks helping it return to 6,300 for the first time
The index rose around 8 percent in January to reach a 2013
peak of 6,354.46 points, before slipping back over the course of
February to trade below 6,300.
"The main trend is up despite the corrective break last
week. Typically, buyers look for value during a correction since
they are confident in trading the trend," James Hyerczyk,
technical analyst at Autochartist, said in a trading note.
While 6,300 acted as a support for the index during January,
it had put a cap on the market during February until now.
The rally was broad-based, with every sector bar materials
contributing to the rally, including stocks that are usually
less sensitive to swings in economic optimism.
Supporting the day's gains was a late surge by
pharmaceutical company Reckitt Benckiser, up 3 percent
after striking a deal to sell Bristol-Myers Squibb drugs
in Latin America.
"The stock was rampant all of last year, and the market
obviously likes this deal," Curr said.
"I don't know whether you'd want to be buying it right here
though, as it's a nice safe stock ... If things started to get a
bit more ugly, however, it might be a stock that you'd want to
go back to."
($1 = 0.6385 British pounds)
(Editing by Ruth Pitchford)