* Energy stocks, drugmakers, banks, supermarkets gain
* BoE keeps rates steady, maintains asset purchases
* Miners lead fallers
By Simon Falush
LONDON, June 4 (Reuters) - Gains in energy stocks,
drugmakers and banks outweighed losses in miners, leaving
Britain's blue-chip index 0.1 percent higher on Thursday after
the Bank of England left interest rates unchanged.
The benchmark FTSE 100 <> index ended up 3.52 points at
4,386.94. The blue-chip index closed 96.60 points or 2.1 percent
lower on Wednesday at 4,383.42.
"The market's evenly balanced. It's discounting good news so
although it may go higher over the next few weeks, it is
slightly overvalued," said Graham Secker, British equity
strategist at Morgan Stanley.
The Bank of England left interest rates unchanged at a
record low of 0.5 percent for the third month running and said
it would continue its 125 billion pound asset-buying programme
to tackle recession. []
Energy stocks added most points to the index, tracking a
rise in the price of crude <CLc1> which coasted towards $69 per
barrel. Heavyweights BP <BP.L> and Royal Dutch Shell <RDSa.L>
added 1.0 and 1.3 percent respectively.
However, miners were the biggest drag on the index, shaving
off 17.5 points despite recovering metal prices, with BHP
Billiton <BHP.L>, Xstrata <XTA.L>, Lonmin <LMI.L> and Anglo
American <AAL.L> dropping 2.5-6.6 percent.
Rio Tinto <RIO.L> was among the heaviest losers, down 6.6
percent with traders citing talk it may look to a rights issue
as a way of dealing with its huge debt burden after reports its
planned $19.5 billion stake sale to Chinalco had collapsed.
POLTIICAL INTRIGUE
Stocks retreated briefly and the pound fell on talk British
Prime Minister Gordon Brown would resign, but the moves were
reversed after the rumours were dismissed by Downing Street.
Analysts said any change in leadership would not necessarily
be detrimental for the market.
"The government's credibility regarding its fiscal rules is
full of holes and if there's a change at the top it wouldn't
obviously weaken sterling," Secker at Morgan Stanley said.
"Perversely it could actually strengthen if the market
thinks there's a steadier hand at the tiller."
Banks gained, recovering from earlier losses. HSBC <HSBA.L>,
Standard Chartered <STAN.L>, Barclays <BARC.L>, Lloyds Banking
Group <LLOY.L> and Royal Bank of Scotland <RBS.L> gained 0.2-3.1
percent.
The European Central Bank kept rates on hold at a record low
of 1 percent but said it expected a much sharper recession in
the euro zone this year than previous forecasts.
Defensive pharmaceuticals stocks and food and drug retailers
also helped the index edge into positive territory.
AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L> and Shire
<SHP.L> gained 0.6-2.7 percent while Tesco <TSCO.L> put on 2.1
percent and Sainsbury <SBRY.L added 2.1 percent.
(Editing by Dan Lalor)
