* FTSE breaches 5,300 level
* Miners, oils lead gains as commodity prices rally
* Defensive drugmakers and tobacco firms fall
By Harpreet Bhal
LONDON, Nov 16 (Reuters) - Britain's leading shares hit a
14-month high by midday on Monday, up for a fourth straight day
as miners and energy stocks rose on an improved demand outlook
and a weaker dollar, while risk-sensitive banks also gained.
At 1220 GMT, the FTSE 100 was up 1.1 percent, or 55.77
points at 5,352.15, extending gains from Friday when the index
hit its highest since September 2008.
Dollar weakness helped support a rally in metals prices, and
gold hit a record high above $1,130 an ounce, giving strength to
mining stocks. Rio Tinto <RIO.L>, Xstrata <XTA.L>, Randgold
Resources <RRS.L> and Antofagasta <ANTO.L> were up 4.3 to 6
percent.
Lonmin <LMI.L> topped the index leader board, up 8.2
percent, as the world's third biggest platinum producer said it
planned to boost output by a fifth by 2013 as prices climb on
shortages, while it posted a swing to an annual loss.
[]
The blue-chip index is up 20.7 percent this year and has
gained almost 55 percent since touching a six-year trough in
March.
Joshua Raymond, market strategist at City Index said the
FTSE's rally has coincided with a fall in the VIX volatility
index <.VIX> -- down 23.9 percent so far this month --
indicating risk wariness among investors was subsiding.
"Now that we have broken through the 5,300 level, a lot of
investors are thinking we can keep going higher and higher. A
lot of people are jumping back on to the recovery bandwagon," he
said.
Energy firms were big winners, underpinned by crude prices
<CLc1>, rising above $77 a barrel on the back of a weak dollar.
BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and
Tullow Oil <TLW.L> put on 0.7 to 1.4 percent.
Banking stocks were led higher by a 2 percent rise in
heavyweight HSBC <HSBA.L>, which added to gains from last week
when it released a strong third-quarter update.
Barclays <BARC.L> and Standard Chartered <STAN.L> were up
1.3 and 0.8 percent, respectively.
A government source said the British government would this
week outline legislation allowing consumers to group together to
claim damages from financial institutions that mislead customers
over financial products. []
DEFENSIVES DECLINE
Defensive stocks, which lose their attractiveness as
investors' confidence improves, were under pressure as risk
appetite intensified.
Drugmakers AstraZeneca <AZN.L> and GlaxoSmithKline <GSK.L>
were both off around 0.6 percent. Shire <SHP.L> bucked the trend
by rising 1.8 percent after JP Morgan raised the stock's price
target to 1,345 pence from 1,120 pence.
Tobacco firms were also lower, with British American Tobacco
<BATS.L> and Imperial Tobacco <IMT.L> down 0.2 and 0.4 percent.
On the economic front, asking prices for homes in England
and Wales were 1.6 percent higher in November than a year ago,
the biggest annual rise since May 2008, property website
Rightmove said. On a monthly basis, however, prices fell 1.6
percent. []
Attention later in the day will be drawn to the U.S. as
investors await retail sales figures for October at 1330 GMT.
U.S. stock futures <DJc1> <SPc1> pointed to a higher open on
Wall Street in anticipation of the data.
(Editing by Will Waterman)
