* FTSE closes up 0.4 pct at 6,808.87 points
* Rise in Lloyds adds most points to FTSE 100
* Sainsbury falls as Bernstein cuts price target
By Sudip Kar-Gupta
LONDON, May 1 Britain's blue-chip share index
hit its highest level in about two months on Thursday, rising
for a fourth straight session as gains at Lloyds bank
buoyed the market.
The FTSE 100 index ended up by 0.4 percent, or 28.84
points, at 6,808.87 points, its highest close since March 4.
Trading volumes were relatively thin, with much of Europe closed
for the May 1 public holiday.
Shares of Lloyds surged 5.5 percent to add the most points
to the FTSE, after the part-nationalised lender posted a 22
percent rise in first-quarter pre-tax profits.
Lloyds also said it would apply to the Bank of England in
the second half to start paying dividends again.
"Lloyds came out with a solid set of numbers which confirmed
a turnaround in their business," said Prime Wealth Group senior
trader Dafydd Davies.
Davies said his firm had been buying Lloyds shares over the
last couple of days and that the stock could rise to about 90
pence from its Thursday level just below 80 pence.
Oil and gas company BG also rose, by 3.3 percent,
after posting a smaller-than-expected drop in first quarter
"The market is certainly getting help from positive news
from several companies, with Lloyds results broadly reflecting a
growth in the economy," said Hargreaves Lansdown equity analyst
Data showing growth in UK manufacturing also supported
market sentiment. However, supermarket operator Sainsbury
was a drag on the market, falling 3.2 percent after
brokerage Bernstein reduced its price target on the company, and
the FTSE's slim gain reflected some caution among investors.
The FTSE 100 hit a peak of 6,867 points in late January,
which was close to its highest level since early 2000, but then
slipped due to concerns over a downturn in emerging markets and
geopolitical tensions in Ukraine.
MB Capital trading director Marcus Bullus said he would look
to see if the FTSE could break above the 6,850-point level
before adding to "long" positions betting on more gains.
Beaufort Securities sales trader Basil Petrides also said
the FTSE could drop back briefly after its recent rally.
"My radar suggests that profit taking is imminent," he said.
(Additional reporting by Atul Prakash; Editing by Susan Fenton)