* FTSE 100 rises 1.2 percent to 3-week high
* Miners standout gainers, follow metal prices higher
* Sainsbury firms on talk of Qatari interest - traders
By Tricia Wright
LONDON, Dec 7 (Reuters) - Britain's top share index rose to
a three-week high on Monday, boosted by miners on firmer metals
prices, and retailers, led by Sainsbury <SBRY.L> on renewed
speculation of Qatari interest.
By 1221 GMT, the FTSE 100 <> was up 71.43 points, or
1.2 percent, at 5,841.71, after it ended up 0.4 percent on
Monday at its highest closing level since Nov. 15.
"It would seem that investors are brushing aside the
concerns over the euro zone and focusing on the good value that
stocks present at the moment," Angus Campbell, head of sales at
Capital Spreads, said.
Mining stocks <.FTNMX1770> added the most points to the
blue-chip index, as metals prices rose, with copper <CMCU3>
rallying to a new record of $9,000 a tonne on tight supply and
rising demand expectations, as well as short covering.
Analysts said sentiment was also helped by M&A activity,
after Rio Tinto <RIO.L>, which rose 2.8 percent, on made a $3.5
billion bid approach for Africa-focused Riversdale Mining
<RIV.AX> on Monday.
Gains may be capped by concern over a possible Chinese rate
hike. China is likely to raise interest rates in the coming days
in a demonstration of the government's resolve to tame
inflation, an official newspaper said. []
RETAILERS BOUGHT
Buyers snapped up retailers, with Sainsbury 4.1 percent
firmer, as traders cited market talk of interest from Qatar.
A trader said he was "hearing talk of Qataris bidding 450
pence (per share) for Sainsbury" but added the stock could be
gaining on the back of Tesco's strong quarterly figures.
Tesco <TSCO.L>, which posted a 7.2 percent rise in
third-quarter sales driven by demand from overseas markets,
added 1.9 percent.
Energy stocks <.FTNMX0530> rose as crude <CLc1> prices
headed above $90 a barrel for the first time in 26 months as
freezing conditions in Europe and the United States stoked fuel
demand.
"There's an expectation that temperatures could fall quite
significantly in the eastern United States, so the markets are
as much watching the weather as they are watching the screens,"
Henk Potts, equity strategist at Barclays Wealth, said.
Among individual movers, Wolseley <WOS.L> rose 4.2 percent,
after the plumbing supplies firm issued an above-forecast
first-quarter trading update.
And Unilever <ULVR.L> added 2.6 percent, buoyed by a Morgan
Stanley double upgrade in rating for the Anglo-Dutch food and
household products giant to "overweight" from "equal-weight",
traders said.
U.S. stock index futures <SPc1> <DJc1> <NDc1> pointed to a
higher opening on Wall Street on Tuesday, after President Barack
Obama announced plans to extend tax breaks.
(Editing by Louise Heavens)
