Gains in mining stocks nudge UK's FTSE higher

Reuters - UK Focus

* FTSE back near touching distance of 2014 peak

* Mining (LSE: MIR.L - news) stocks boosted by JP Morgan (Other OTC: JPYYL - news) upgrade

By Sudip Kar-Gupta

LONDON, May 12 (Reuters) - A rise in heavyweight miningstocks lifted Britain's top equity index on Monday, pushing theUK stock market back towards its highest level since early 2000.

The blue-chip FTSE 100 index was up by 0.2 percent,or 13.84 points, at 6,828.41 points in mid-session trading -within touching distance of a peak of 6,867.42 points reached inJanuary which was close to its highest level since early 2000.

Mining stocks added the most points to the FTSE, with RioTinto rising 2.9 percent while BHP Billiton (NYSE: BBL - news) gained 1.8 percent, after investment bank JPMorgan (Other OTC: MGHL - news) raised its rating on the sector to "overweight" from"underweight".

Although the mining sector has been dogged by concerns aboutan economic slowdown in China - which is the world's biggestmetals consumer - JP Morgan pointed to signs of a rebound inChinese economic activity.

Earlier this month, data showed that China's exports andimports had returned to slight growth in April as orders to theUnited States and European Union surged, offering some positivesignals for the world's second-largest economy after aweaker-than-expected start to 2014.

"I think there is more upside in the miners," said EdwardSmyth, investment manager at JNF Capital.

Smyth said he would keep small "long" positions betting onfurther gains on the FTSE up to the 6,875 points level.

Macquarie strategist Daniel McCormack said that whileconcerns over Ukraine, where Kiev authorities have clashed withpro-Moscow supporters, could curb the FTSE's progress in thenear-term, he was more bullish over the longer term.

"Longer term, there is still quite a bit of upside to comebecause I do think that earnings will improve. We have still gotscope for an earnings-driven rally on a 12 to 18-month view," hesaid. (additional reporting by Atul Prakash, editing by LouiseHeavens)

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