* Banks gain, Barclays surges on upgrade
* Energy, mining stocks lifted by commodity prices
* Fed comments, Asian data lift sentiment
* FTSE on track for biggest weekly gain since 1992
By Simon Falush
LONDON, April 30 (Reuters) - Banks and commodity stocks
rallied on Thursday to lift Britain's FTSE 100 share index 2.1
percent by midday after the U.S. Federal Reserve gave cause for
hope that prospects are brightening for the global economy.
On a busy day for company results the FTSE 100 <> was
87.79 points higher at 4,277.35 at 1100 GMT, after gaining 2.3
percent on Tuesday to post its highest close since February 13.
The index is up 9.1 percent in April, its best monthly
showing since 1992.
Factory output in Asian export powerhouses Japan and South
Korea picked up in March in another sign that the global slump
may be easing, after the Federal Reserve said the U.S. economic
contraction was slowing.
Banks added most points to the blue chip index with HSBC
<HSBA.L>, Standard Chartered <STAN.L>, and Lloyds Banking Group
<LLOY.L> adding between 3.6 and 9 percent.
Barclays <BARC.L> jumped 10 percent, the top gainer on the
index after Royal Bank of Scotland <RBS.L> upgraded it to "buy"
from "sell".
The UK bank index <.FTNMX8350> is up 99 percent since its
trough in March while Barclays has rocketed by almost 500
percent.
U.S. stocks shot higher on Wednesday after the Fed said the
pace of contraction in the economy appeared to be slowing.
"The economic outlook is looking a bit less gloomy than it
did a couple of weeks ago, and it feels like a market in which
investors want to buy," said Peter Dixon, economist at
Commerzbank.
But he cautioned that the rally may not be sustainable.
"The problem is earnings are not getting better so
valuations are looking stretched and the higher markets go the
more scope there is for them to fall."
Commodity stocks climbed as raw material prices rose on
hopes of an improved demand outlook.
Miners Rio Tinto <RIO.L>, Kazakhmys <KAZ.L>, Eurasian
Natural Resources <ENRC.L>, Anglo American <AAL.L>, Lonmin
<LMI.L> and BHP Billiton <BLT.L> added between 1.7 and 5.8
percent. Kazakhmys and Anglo American both issued trading
updates.
Energy companies gained as crude <CLc1> rose to nearly $52
per barrel. Royal Dutch Shell <RDSa.L>, Tullow Oil <TLW.L> and
Cairn Energy <CNE.L> added between 0.4 and 1.9 percent.
BG Group <BG.L>G gained 3.8 percent after it posted
forecast-beating first-quarter earnings. []
RATES HELD
At the conclusion of its monetary policy committee meeting
on Wednesday the Fed kept its interest rates unchanged at
rock-bottom and the Bank of Japan also kept its interest rates
steady after its latest meeting on Thursday.
But British consumer confidence recovered to its highest
level in a year in April as gloom over the economic outlook
dissipated to levels not seen since the start of the credit
crunch, a survey showed on Thursday.
The GfK/NOP consumer confidence barometer rose three points
to -27 this month, its highest level since April 2008 and its
third consecutive monthly rise. []
However, in a sign the economy is still mired in recession,
British house prices resumed their slide in April, data from
mortgage lender Nationwide showed, suggesting last month's rise
might be no more than a blip in a downward trend. []
Cadbury <CBRY.L> fell 1 percent after its first quarter
trading update disappointed, with underlying sales growth of 2
percent below analysts forecasts, Citigroup said in a note.
British Sky Broadcasting <BSY.L> added 5.1 percent after its
results beat forecasts with 80,000 net new customers in the
third quarter.
Investors, who will get U.S. Chicago PMI and core PCE
economic data later in the day, shrugged off uncertainty about
swine flu.
The World Health Organization said on Wednesday the world is
on the brink of a pandemic, raising its threat level to the
penultimate Phase 5. []
(Editing by Greg Mahlich)
