Banks, miners propel FTSE share index to new record high

Britain's FTSE 100 share index surged to a fresh record high on Wednesday, with commodities-related stocks tracking stronger metals, while banks gained on expectations of further hikes in US interest rates. The index closed up 1.6 percent at 7,382.90 points, its highest level ever, taking gains to more than 27 percent since a Brexit vote sell-off in June last year.
Banks were prominent among the gainers following signs from two influential Federal Reserve policymakers that US interest rates could rise this month, fuelling hopes of an improvement in their margins.
New York Fed President William Dudley, a permanent voter on the US central bank's open market committee and close ally of chair Janet Yellen, said that the case for tightening monetary policy "has become a lot more compelling".
"In fact, prospects of significant fiscal spending could push more Fed members to the hawkish camp," said Ipek Ozkardeskaya, analyst at London Capital Group, adding that traders were in hurry to readjust Fed expectations.
The UK banking index rose 2.2 percent as Standard Chartered, HSBC and Barclays gained 2.5 to 3.6 percent.
Miners helped the widely-followed British index as copper climbed to its highest level in nearly a week on concerns about a shortage of supply and an upturn in manufacturing growth in top metals user China. Prices of other major metals such as aluminium, nickel and zinc were also higher.
The sector reacted positive after an official survey showed that activity in China's manufacturing sector expanded at a faster rate than expected in February.
The UK mining index rose 3.5 percent, the biggest sectoral gainer, supported by share price rises of between 3.1 and 4.9 percent for BHP Billiton, Glencore , Anglo American and Rio Tinto.
Elsewhere, strong earnings growth and cash generation last year drove shares in building materials group CRH as it awaited a further, medium-term boost to infrastructure under US President Donald Trump. CRH climbed 4.9 percent.
Gold miners, however lost out following a rise in the dollar on the US rate hike expectations. A firmer dollar tends to make gold costlier for holders of other currencies and shares in Fresnillo and Randgold Resources fell 0.9 percent and 1.1 percent respectively.
The broader market showed little reaction to data showing Britain's factory sector grew more slowly than expected in February but still looked set to help the economy keep up its strong, post-Brexit vote momentum in early 2017.