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Monday, 30 May 2016

FTSE set for biggest weekly gain since mid-April

A worker shelters from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008.  REUTERS/Toby Melville/File Photo

The FTSE 100 was set for its biggest weekly gain for six weeks on Friday, trading flat and consolidating recent gains after a sharp rally to a one-month high.

The commodity-heavy FTSE 100 .FTSE was up 1.7 percent on the week, buoyed by an oil price rally to more than $50 a barrel for the first time this year, as well as a rise in banks.

The index hit its highest level since April 29 on Thursday having risen more than 2 percent in three days.

The FTSE 100 was down 5 points, or 0.1 percent, at 6,260.65 by 0723 GMT, having broken out of a 220-point range that has persisted for most of May.

Some have cited the declining chance of Britain leaving the EU in a referendum next month, according to recent polls, as supporting recent gains, although the persistent uncertainty has subdued investment in British assets.

Traders said a speech by Federal Reserve Chair Janet Yellen later in the day might be the next catalyst for markets.

"We've had a decent move upwards over the last week or so, helped by the rise in crude above 50 bucks. But if some of these commodity-related stocks and financials start to tail back off again, then the overall market could drift heading into the weekend," TJM Partners head of trading, Manoj Ladwa, said.

"With the headwinds of a possible interest rate hike from the Federal Reserve, and the EU referendum in June, there might not be a huge amount of new money coming into the market."

The source of much of the strength of this week, oil & gas stocks failed to make much headway. Oil futures slipped back from $50 a barrel, on concerns that higher prices could reactivate shuttered crude output.

The biggest faller on the index was outsourcing firm Capita (CPI.L), down 2 percent after it was cut to "underperform" by Exane BNP Paribas.

The top risers were in the mining sector which rose 1.2 percent, helped by a slight rebound in copper from substantial falls so far this month.

Reference: ALISTAIR SMOUT

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