May 29, 2009 / 4:17 PM / 9 years ago

FTSE ends up in May, rises for 3rd straight month

* FTSE 100 gains 4.1 pct in May, up for 3rd month in a row

* UK house prices, consumer confidence data lift sentiment

* Banks, commodity stocks top-weighted gainers

By Dominic Lau

LONDON, May 29 (Reuters) - Britain's blue chip index ended 0.7 percent higher on Friday, boosted by firmer UK house prices and steady consumer confidence, with commodity stocks and banks leading the way but defensive shares came under pressure. The FTSE 100 .FTSE closed 30.40 points higher at 4,417.94. The UK benchmark has advanced 4.1 percent this month -- its third monthly rise in a row and the longest winning streak in two years.

Volumes on the FTSE 100 were at about 82 percent of the index’s 90-day average daily volume.

Miners and oil producers added most points to the index as prices of crude CLc1 and metals gained on hopes of improving growth.

Oil majors BP (BP.L) and Royal Dutch Shell (RDSa.L) put on 0.5 and 0.9 percent respectively, while gas producer BG Group BG.L rose 4.5 percent.

In the mining sector, BHP Billiton (BLT.L), Rio Tinto (RIO.L), Lonmin (LMI.L), Xstrata XTA.L, Anglo American (AAL.L), Antofagasta (ANTO.L) and Kazakhmys (KAZ.L) were up between 1.6 and 8.4 percent.

Sentiment was lifted by the Nationwide building society’s survey, which showed British house prices rose 1.2 percent in May — the second time in three months — slowing the annual rate of decline to its lowest since August. [ID:nLAG003459]

Figures also showed British consumer confidence held steady in May as rising gloom over the economy was offset by an improvement in Britons’ expectations for their own finances.

“It’s likely to remain in this range (of 4,300 to 4,500). If it breaks through 4,300 or 4,500, we will probably see a new leg in either direction,” said Jawaid Afsar, trader at Securequity.

The FTSE 100 has been trading in that range in the past four weeks. The index is still down 0.4 percent this year despite rallying 28 percent since hitting a six-year trough on March 9.

“But the market is very well supported at 4,300 and I would not expect it to fall back,” Afsar said, adding that even though activity was thin, there was a general upward bias in the market.

Apart from the UK data, Japanese factory output, German retail sales and Indian GDP also raised hopes that the global economy was responding after months in intensive care.

The U.S. economy also contracted slightly less than initially estimated in the first quarter, data showed.

But business activity in the U.S. Midwest shrank in May at a far more severe rate than expected, with hiring in the deep-freeze in what many analysts saw as fallout from the collapsing auto sector. [ID:nN29543747]


With the stronger-than-expected UK house prices, sterling GBP= hit its highest level against the dollar since early November.

But the pound’s rally had not curbed equities.

“I don’t think it’s enough to put people off buying UK assets per se because they’re still quite lowly rated compared to where they’ve been historically,” said Andrew Bell, strategist at Rensbury Sheppards Investment Management.

Banks were other standout gainers on Friday, with Barclays (BARC.L), HSBC (HSBA.L), Lloyds Banking Group (LLOY.L), Standard Chartered (STAN.L) and Royal Bank of Scotland (RBS.L) up 1.4 percent to 4.6 percent.

Thomas Cook (TCG.L) fell 3.3 percent. Its debt-laden parent Arcandor AROG.DE lost 10.8 percent after a report said the German retail and tourism group did not meet the requirements for state aid.

Arcandor was not immediately available for comment.

Shares in water company Severn Trent (SVT.L) lost 1.8 percent after its full-year results failed to excite.

Other defensive stocks, such as cigarette makers and food retailers, were also down. Imperial Tobacco IMT.L lost 2 percent, mobile phone operator Vodafone (VOD.L) eased 1 percent and Sainsbury (SBRY.L) shed 2.7 percent. (Additional reporting by Catherine Bosley; Editing by Rupert Winchester)

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