* FTSE 100 advances 0.8 percent
* Index on track for sixth month of gains
* Rio Tinto top gainer after cost-cutting plan
By Toni Vorobyova
LONDON, Nov 29 (Reuters) - Britain’s FTSE 100 rose to three-week highs on Thursday, with miners and other exporters up on growing hopes of achieving a U.S. budget deal to avoid recession in the world’s biggest economy.
The U.S. ‘fiscal cliff’ of some $600 billion in spending cuts and tax hikes that is otherwise due to come into force in 2013 has overtaken the euro zone crisis as the top concern for investors. U.S. House of Representatives Speaker John Boehner sparked a rally in global risk assets after he voiced optimism on Wednesday that a compromise could be reached.
President Barack Obama added to the positive mood, saying he hoped to get a deal done in the next four weeks.
“I think it’s one of those things they have to sort out, because the ramifications for allowing that to happen would be unfathomable in this market at the moment,” said Steve Asfour, head of sales trading at Fox Davies Capital.
The FTSE 100 was up 0.8 percent, or 47.65 points, at 5,850.93 by 1133 GMT, testing levels last seen on Nov. 7 and heading for its sixth straight month of gains.
“A lot of these funds are happy to continue to push along their stocks higher,” Asfour said. “I genuinely think we will go towards 6,000 - may be 5,950 and then, going into the new year, it wouldn’t surprise me to see a big wobble down to 5,500.”
Thursday’s move higher took the UK benchmark through technical resistance at the 50-day moving average around 5,819 points. However, the index remained firmly within the 5,600 to 5,950 range it has been stuck in since late July, and Westhouse Securities technical analyst Dominic Hawker said it was too early to call for a breakout to the upside.
“Rallying in a range is very erratic, fairly low conviction,” he said. “I am still neutral.”
Miner Rio Tinto, the 10th-biggest stock in the FTSE 100, was the top gainer, adding 4.2 percent, after setting out clear plans for operational cost cuts and voicing guarded optimism on demand from key market China.
The FTSE 350 mining sector added 2.6 percent.
The market rally spread across most sectors, with only eight of the UK blue chips in negative territory.
John Wood Group was the biggest loser, down 4 percent after Credit Suisse said it had placed 16.4 million shares in the oil services firm on behalf of the Wood Family Trust and others, representing around 4.4 percent of its issued share capital, at a price of 775 pence per share. (Editing by Stephen Nisbet)