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UK stocks : FTSE up 0.2 pct

Jan 29 2013, 06:26 IST
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Britain's top share index breached the 6,300 level for the first time since May 2008 on Monday. (Reuters) Britain's top share index breached the 6,300 level for the first time since May 2008 on Monday. (Reuters)
SummaryBritain's top share index breached the 6,300 level for the first time since May 2008 on Monday.

UK stock closing: Britain's top share index breached the 6,300 level for the first time since May 2008 on Monday, driven by strength in banking and energy stocks, although that heady height failed to hold for the close.

Global giant HSBC added the most points to the FTSE 100 index, with its 1.0 percent advance alone accounting for almost 5 index points and helping the UK banking sector to a 0.8 percent gain, with the lender highlighted as Goldman Sachs preferred UK banks pick in a sector review.

Goldman reiterated its "conviction buy" rating on HSBC on the basis of relative valuation, return trends and expectations.

The bank also repeated its "buy" rating on Barclays , the top percentage blue chip gainer, up 1.7 percent.

But Goldman downgraded its rating for Royal Bank of Scotland to "sell" as it believes the majority-state-owned lender is the most exposed to near-term regulatory risk.

RBS shares still gained 0.5 percent with the banking sector overall buoyed by Friday's news that banks will repay early 137 billion euros of crisis loans taken a a year ago from the European Central Bank, and which ECB President Mario Draghi has said "avoided a major, major credit crunch".

The bigger-than-expected repayment was seen as a sign that at least parts of the financial system are returning to health.

Other financial stocks also took heart from the move, with Aberdeen Asset Management rallying 1.6 percent, and insurer Standard Life up 1.2 percent.

The FTSE 100 index closed up 9.96 points, or 0.2 percent at 6,294.41, having reached a fresh 4-3/4 year peak of 6,311.26.

"The benchmark has now seen off four major figure levels in under a month and is now 6.7 percent higher than where it started the year which has caught even some of the more bullish investors by surprise," Angus Campbell, Head of Market Analysis, Capital Spreads said.

"Since we've seen such considerable strength in equity markets so far this year there's bound to be some resistance near the highs, but with the 6,300 level now behind us for those bullish investors the only way is up," Campbell added.

Market heavyweight Vodafone was also a big contributor to the FTSE 100 advance again, up 0.5 percent and adding more than 1.6 points to the index as the telecoms firm extended its advance into a third consecutive session.

Traders have cited talk that the mobile telecoms group may sell its stake in its U.S. wireless joint

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