U.K.’s FTSE 100 Index Climbs, Extends Weekly Rise; RBS Advances

By Adam Haigh

May 8 (Bloomberg) -- U.K. stocks gained, extending this week’s rally on the FTSE 100 Index, after U.S. Federal Reserve Chairman Ben S. Bernanke said results of the government’s review of the banking industry’s health should reassure investors.

Rio Tinto Group and BHP Billiton Ltd. led raw-material producers higher as metals prices climbed in London. Royal Bank of Scotland Group Plc rose 5.5 percent after it reported increased revenue.

The benchmark FTSE 100 Index rose 69.72, or 1.6 percent, to 4,468.4 at 8:38 a.m. in London, bringing this week’s gain to 5.3 percent. The FTSE All-Share Index added 1.5 percent today and Ireland’s ISEQ Index gained 2.7 percent.

The FTSE 100 index has soared 27 percent from its March 3 low on optimism the worst of the global recession may be over. Economic reports this week showed consumer confidence in the U.K. jumped by the most in almost two years, while private employers in the U.S. cut fewer jobs than estimated in April.

A measure of bank shares on the FTSE 350 Index extended this week’s rally to 13 percent as Bernanke said the government’s review of the banking industry’s health “should provide considerable comfort.”

They were “breathtaking figures,” said David Buik, a markets analyst at inter-dealer broker BGC Partners in London. “This rally is incredible. It amazes me that such gargantuan numbers can be digested by the market with a shrug of the shoulders,” he told Bloomberg Television.

Manic Miners

Rio Tinto Group, the world’s third biggest mining company, climbed 2.7 percent to 3,101 pence. BHP Billiton, the largest, gained 2.1 percent to 1,544 pence. Copper gained 1.3 percent on the London Metals Exchange.

Royal Bank of Scotland added 11 percent to 46 pence. Revenue at the biggest U.K. bank controlled by the government rose 26 percent to 9.7 billion pounds ($14.4 billion).

The bank, which is 70 percent-owned by the government, has gained 73 percent in London trading in the past three months, making it the second-best performer in the FTSE 350 Banks index, after Barclays Plc.

Taylor Wimpey Plc soared 26 percent to 46 pence after the homebuilder said it was selling about 510 million pounds in shares to help pay down debt.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.