Oil, mining shares send FTSE up 1.7 pct early on

* FTSE rises on oil, mining shares

* Manufacturing contracts at slowest rate in a year

* Chinese PMI data boost sentiment, Asian markets

* Sterling climbs to highest since November vs dollar

By Catherine Bosley

LONDON, June 1 (Reuters) - Optimism about the global economy lifted crude and metal prices, boosting commodity stocks and helping Britain’s top share index climb 1.7 percent early on Monday.

At 0836 GMT the FTSE .FTSE 100 was up 73.34 points at 4,491.45. The British benchmark rose 4.1 percent last month -- its third monthly rise in a row and the longest winning streak in two years.

The index closed 0.7 percent higher on Friday.

The MSCI index of Asia Pacific stocks outside Japan .MIAPJ0000PUS jumped more than 2 percent to its highest point since October, after data showed China's official purchasing managers index stayed above the 50 level, which separates contraction from expansion, for a third straight month.

The news raised confidence the struggling global economy may have turned a corner.

“We’re seeing some follow-through from Friday night on Wall Street and this morning in turn from Asia,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.

“The pattern this morning is cyclical, financial driven stocks,” he said. “Commodities in the UK are the biggest cyclical sector of the market.”

Mining stocks led the charge higher, lifted by firmer metals prices, with Vendanta Resources VED.L, BHP Billiton BLT.L, Rio Tinto RIO.L, Xstrata XTA.L and Kazakhmys KAZ.L rising between 4.9 and 6.4 percent.

Rio Tinto has agreed to extend the deadline by which major Chinese shareholder Chinalco must confirm whether it will help fund the planned expansion of Rio’s Yarwun 2 Alumfina refinery. [ID:nSYU006609]

U.S. crude oil CLc1 motored past $67 per barrel to a seven-month high, sending shares in BP BP.L, Royal Dutch Shell RDSa.L and BG Group BG.L up between 0.7 and 1.4 percent.

Oil giant Shell plans to cut 350-450 senior management roles as part of its restructuring programme, according to a website to which employees post internal information. [ID:nLU499375]


Data showed Britain’s manufacturing sector contracted at its slowest pace in a year in May, but the market was expecting a strong number and the FTSE showed little reaction. [ID:nLAG003470]

Shares in Barclays BARC.L were up 2 percent, Standard Chartered STAN.L rose 1.4 percent, and Lloyds LLOY.L was up 2.5 percent. However, HSBC HSBA.L underperformed, gaining 0.5 percent.

Sterling climbed to its strongest level since early November against the U.S. dollar GBP=D4. Lenhoff said so far the pound's strength was not undermining the FTSE's drive higher, though it could in coming weeks if the dollar continued to slide.

In the United States, officials said General Motors Corp GM.N will file for bankruptcy on Monday, forcing the 100 year-old automaker once seen as a symbol of American economic might and dynamism into a new and uncertain era of government ownership. [ID:nN31495007].

The move removes short-term uncertainty from the market, traders said. (Editing by Jon Loades-Carter)