Strong banks helped drive Britain's top share index higher on Thursday on hopes for the sector's outlook, while a firmer crude price lifted oils and miners were bolstered by improved risk appetite, according to Reuters. By 0827 GMT, the FTSE 100 was up 54.20 points, or 1.1 percent, at 5,069.02, rising for a third consecutive day. It closed up 49.82 points or 1 percent on Wednesday. Banks were among the biggest gainers, with Royal Bank of Scotland and Lloyds Banking Group adding 5.1 percent and 4.5 percent respectively, extending advances made on Wednesday after U.S. peer State Street said its quarterly operating earnings would easily top Wall Street forecasts. "Positive comments from State Street ... cheered investors up on the basis that we've got the second-quarter reporting season coming up and perhaps the bank situation in terms of reporting might not be as bad as feared," said Richard Hunter, head of UK equities at Hargreaves Lansdown. Expectations that stress tests for European banks will not be as stringent as feared also supported the sector, together with some upbeat broker comment. Credit Suisse raised its sector strategy on European banks to benchmark from 10 percent underweight in a global equity strategy note. "We've got some more positive noises coming out around the European stress tests and again that the general situation may not be as bad as feared. And the third or triple whammy was the IMF upping its global growth forecasts," Hunter said. The International Monetary Fund on Thursday upgraded its 2010 global growth forecast, on the back of robust growth in Asia and renewed U.S. private demand, but it also flagged big risks to the recovery from Europe's debt problems. Miners made ground, with Xstrata leading the sector higher, adding 3.7 percent, supported by an upgrade to "hold" from "sell" by Panmure Gordon. ENERGY BOOST Buyers also came in for integrated oil stocks, which were helped by a firmer crude price. BP was the best off, adding 2.2 percent. The oil major's boss Tony Hayward met with an Abu Dhabi state investment fund on Wednesday, part of a quest for cash to ward off takeovers and help pay for the worst oil spill in U.S. history. The company aims to fix its leaking Gulf oil well by July 27, ahead of its earlier target of mid-August, to show investors it has limited its burgeoning oil spill liabilities, the Wall Street Journal said, citing company officials. Among individual movers, Aggreko grabbed the top spot on the blue chip leader board, adding 4.4 percent as HSBC started coverage on the temporary power supplier with an "overweight" rating. Elsewhere, ARM Holdings climbed 3.2 percent as Panmure Gordon raised its earnings forecasts for the chipmaker by up to 30 percent and lifted its target price to 275 pence from 210 pence. Elsewhere a key focus for UK investors was the latest Bank of England rate decision. Economists expect the BoE to leave interest rates pegged at a record low 0.5 percent and the stock of assets bought under quantitative easing to remain unchanged at 200 billion pounds, when the MPC's decision is revealed at midday.
