* FTSE back near touching distance of 2014 peak
* Mining stocks boosted by JP Morgan upgrade
By Sudip Kar-Gupta
LONDON, May 12 A rise in heavyweight mining
stocks lifted Britain's top equity index on Monday back towards
its highest level since early 2000.
The blue-chip FTSE 100 index was up by 0.5 percent,
or 31.91 points, at 6,846.48 points in late-session trading -
within touching distance of a peak of 6,867.42 points reached in
January, which was close to its highest level since early 2000.
Mining stocks added the most points to the FTSE, with Rio
Tinto rising 4.9 percent while Antofagasta
and BHP Billiton rose 3.4 and 2.7
percent respectively, after investment bank JP Morgan raised its
rating on the sector to "overweight" from "underweight".
Although the mining sector has been dogged by concerns about
an economic slowdown in China - which is the world's biggest
metals consumer - JP Morgan pointed to signs of a rebound in
Chinese economic activity.
Earlier this month, data showed China's exports and imports
returned to slight growth in April as orders to the United
States and European Union surged. That was a positive signal for
the world's second-largest economy after a weaker-than-expected
start to 2014.
"Clearly such a bullish upgrade on the mining sector from JP
Morgan is always going to have a knock on effect on the
FTSE," said IPR Capital director Steven Mayne.
"The rally in the miners has also been helped by a
strengthening in copper, as well as an uplift on gold that has
again bounced upwards from support."
Macquarie strategist Daniel McCormack said concerns over
Ukraine, where Kiev authorities have clashed with pro-Moscow
supporters, could curb the FTSE's progress in the near-term.
Mayne also saw more value in the actual commodities
themselves, such as gold and silver, than in
equity indexes or individual mining shares.
Mayne added he was tempted to "short" the FTSE - to bet on
it retreating in the near-term - while taking up positions to
bet on more gains in metal prices.
But McCormack was more bullish on the FTSE over the longer
term, with many investors expecting the FTSE to hit a record
high of 7,000 points later this year. The index is up by around
1.4 percent since the start of 2014.
"Longer term, there is still quite a bit of upside to come
because I do think that earnings will improve," he said. "We
have still got scope for an earnings-driven rally on a 12- to
(Additional reporting by Atul Prakash Editing by Catherine