Britain's FTSE 100 index rose 1.3 percent on Thursday to post its biggest monthly rise since 2003 on hopes of brightening global economic prospects, with financials and miners the leading gainers. The UK benchmark closed 54.12 points higher at 4,243.71, after trading as high as 4,293.63 during the session.
It was the highest closing level in 11 weeks, largely shrugging off the World Health Organisation's move of raising its pandemic alert level to phase 5 on a swine flu outbreak. The index gained 8.1 percent this month, its biggest monthly rise since April 2003, but it is still down 4.3 percent this year. The FTSE 100 had fallen more than 31 percent in 2008.
Investors were reassured by economic data from the United States and Asian export powerhouses Japan and South Korea, and comments from the US Federal Reserve that the country's economic contraction was slowing. The banking sector was the best performer on the FTSE 100, with HSBC, Barclays, Royal Bank of Scotland, Lloyds Banking Group and Standard Chartered gaining between 3.3 and 13.6 percent.
A rating upgrade from RBS also boosted Barclays. The FTSE 350 banking index has nearly doubled since its trough in March, while Barclays shares rocketed by almost 500 percent since January. Insurers also rallied as stock market valuations rebounded. Aviva, Legal & General, Friends Provident, Prudential and Old Mutual added 5.4 to 13 percent.
Motor insurer Admiral Group shed 4.1 percent after Munich Re cut its stake in the UK firm to 10.2 percent from 15.1 percent to reduce risk in its equity holdings. "Everything has been looked up positively at the moment. Disappointing news is just being ignored, good news is being jumped on as an excuse to get involved," said David Morrison, market strategist at GFT Global Market.
Britain's consumer confidence recovered to its highest level in a year in April as gloom over the economic outlook dissipated to levels not seen since the start of the credit crunch, a survey showed. Miners tracked firmer metal prices. Kazakhmys, Vedanta Resources, Xstrata, Antofagasta, Anglo American, BHP Billiton and Rio Tinto rose between 2.9 and 8.9 percent.
But UK-listed Mexican silver producer Fresnillo sank 2.8 percent to top the FTSE 100 fallers. The company said its mines remained open despite the worsening outbreak of swine flu. In Mexico, up to 176 people have been killed. Gas producer BG Group put on 1.5 percent after posting forecast-beating first-quarter earnings.
Drugmaker AstraZeneca also reported above-forecast quarterly results but its shares fell 2.4 percent. Peer Shire lost 1.6 percent, even though its first-quarter revenues met expectations. Pay-TV operator BSkyB surged 4.7 percent after beating third-quarter forecasts with 80,000 net new customers due to strong demand for its high-definition offer.
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