* FTSE 100 index ends 0.8 percent higher
* Cyclicals advance after U.S. manufacturing data
* Aberdeen Asset Management gains more than 6 pct
By Atul Prakash
LONDON, April 1 Britain's top share index
touched a three-week high on Tuesday, with cyclical stocks
rallying on the back of an improving U.S. economic outlook and
expectations of more stimulus from China.
The blue-chip FTSE 100 index extended earlier gains
to set its highest level since March 12 after data showed U.S.
factory activity accelerated for a second straight month. The
index closed up 0.8 percent at 6,652.61 points.
The UK banking index rose 1.2 percent, the top
sectoral gainer, while miners advanced 1 percent on
expectations that China, the world's biggest metals consumer,
will announce more measures to prop up its economy.
Global diversified miner Rio Tinto rose 1.1 percent
and Vedanta Resources advanced 0.9 percent.
"Mining is a very healthy area of the market. Anything that
takes away some tail risk on the Chinese activity side and
provokes a new stimulus package will certainly help to reassure
the market," said Ian Richards, global head of equities strategy
at Exane BNP Paribas.
A string of weak economic data from has lent support to a
view the Chinese government will try to boost demand, and
premier Li Keqiang said last week Beijing could act to support
BHP Billiton, up 2.1 percent, led the mining sector
higher on news that it was considering options to simplify its
portfolio of assets, including a possible spin-off of unwanted
operations like aluminium and nickel into a separate company.
"For those investors looking to increase their exposure to
more cyclical parts of the market, we believe the mining sector
offers a number of attractive stocks," said Paul Kavanagh,
director of market research at Killik & Co.
"Although uncertainty over the outlook for economic growth
in China, the main buyer of many commodities, provides a
near-term headwind, we believe the decisions from the Chinese
government ... reduce the likelihood of a sudden economic
Among other sharp movers, Aberdeen Asset Management
rose 6.7 percent to be the top percentage gainer on the FTSE
100. Investors welcomed cost cuts at the asset manager and a
slowdown in the pace of outflows, confounding hefty bearish bets
on the stock.
Markit data showed the stock was heavily "shorted" by
speculative investors in recent months in anticipation of poor
Charts signalled more gains, with analysts saying the FTSE
100 could move up towards the top end of a range, between 6,400
to 6,800 points, it has been trapped in since late October.
"In the short-term, a potential break above 6,655 - which
marks the convergence of the 50-day moving average with a
short-term bearish trend line - could see the index squeeze
higher towards ... 6,755 or 6,885," FOREX.com technical analyst
Fawad Razaqzadaat said.
(Additional reporting by Tricia Wright; Editing by Catherine