* FTSE 100 up 0.5 pct
* BT and mining stocks rise
* Majority of investors remain bullish on FTSE long-term
By Sudip Kar-Gupta
LONDON, Feb 1 A rise in telecoms group BT
and mining stocks drove Britain's benchmark share index higher
on Friday, pushing the market back to within reach of its
highest level in four and a half years.
The blue-chip FTSE 100 index was up by 0.5 percent,
or 30.84 points higher, at 6,307.72 points -- pushing it back to
near its best level since around mid-2008.
The market had fallen 0.7 percent on Thursday, but BT led
the FTSE 100's recovery, rising 4.1 percent to add the most
points to the index after BT reported better-than-expected
"BT has achieved much in turning around what had been a
flailing former monopoly," said Richard Hunter, head of equities
at Hargreaves Lansdown Stockbrokers.
Berkeley Futures associate director Richard Griffiths said
some investors were buying FTSE 100 "put" options -- which gives
the right to sell an index at a set price in the future -- which
had strike prices of 6,100 points for a mid-February expiry.
This implied a potential 200 point drop in the market over
the next two weeks, but Griffiths said the majority of investors
remained bullish on the longer-term prospects for the market,
with many looking to buy stocks on the dip when the FTSE fell.
"We've had a good run and some people are expecting a bit of
a near-term correction. But it's very evident that people are
still buying on the dip," he said.
Mining stocks also rose after new signs of economic growth
in China, the world's biggest consumer of metals, with the FTSE
350 mining index advancing by 1.2 percent.
Colin McLean, managing director at SVM Asset Management,
said some traders were switching out of bank stocks, with
European lenders hit by weak results at the likes of Credit
Agricole and Deutsche Bank, and into
"The banks have had a good run, and investors are looking at
the bigger mining stocks," said McLean.
McLean added the FTSE 100 could reach the 6,800 point level
by mid-2013, helped partly by investors moving out of bonds and
cash into equities, due to the higher returns on offer through
stocks' dividend payouts.
"I think the market can still go higher," he said.
(Reporting by Sudip Kar-Gupta; additional reporting by David
Brett/editing by Chris Pizzey, London MPG Desk, +44 (0)207