* FTSE 100 rises 0.6 percent
* Banks and miners gain following China trade data
* 6,300 seen as a key resistance level
* FTSE set to gain following consolidation
By Alistair Smout
LONDON, Feb 8 (Reuters) - Britain’s FTSE 100 rebounded on Friday, boosted by banks and miners after forecast-beating Chinese trade data reinforced hopes the global economy is growing.
However, the blue-chip index still posted its first weekly loss this year, after closing just off a 4-1/2 year peak last Friday.
The FTSE 100 closed up 35.51 points, or 0.6 percent, at 6,263.93 points, recouping some of the previous session’s 1.1 percent drop but leaving the index down 1.3 percent from a week ago.
Financials, a sector which includes banks, insurers and asset managers and that benefits from the risk-taking that accompanies economic optimism, added 25 points to the index, accounting for around 70 percent of the index’s gains.
“With any small pullback, they’re putting riskier positions back on again... and it was the banks that struggled the most during the pullback, so I think there’s been some buying at the bottom to propel them back up again,” Manoj Ladwa, head of trading at TJ Markets, said.
“The FTSE needs to get above 6,300 if there’s going be a sign that we’re going to resume that upward trend. But investors still seem happy to pick up stocks on any of these dips that we’ve been seeing.”
Since posting its biggest one-day fall in three months on Monday, the index has failed to close above 6,300 all week, following a rally to a 4-1/2 year peak of 6,354.46 last week.
Ladwa said he had seen interest in miners following bullish data from China, which helped to lift the mood for riskier equities globally.
The data prompted a surge in cyclical stocks such as miners and banks, which rise and fall with optimism about the economy.
Banks led sectoral gainers, rising 2.3 percent. Asia-focused HSBC - the biggest weight on the index - contributed 11.9 points to the FTSE’s advance, benefiting also from Goldman Sachs’ reiteration of their “Conviction Buy” rating on the bank.
The sharp rally which started the year saw the index post its best January since 1989. However, technical indicators suggested that gains needed to be consolidated to sustain further moves upwards.
“The rally that we had at the start of the year went too far too quickly,” said Fawad Razaqzada, market strategist at GFT Markets.
The Relative Strength Index on the FTSE hit a high of 83 at the end of January, with a level over 70 suggesting that an index is technically “overbought”. The weekly fall has brought the RSI back to below 60, suggesting the index is well placed to push higher in the medium term.
“We have seen a recovery from the small sell-off earlier in the week and the uptrend continues,” Atif Latif, director of trading at Guardian Stockbrokers, said.
“The FTSE should look to test 6415 and then move to 6550... If so this reinforces the bullish outlook in the short term.”