Britain's top share index rises

Britain's top share index ended up 0.8 percent on Friday, led by heavyweight oil stocks as crude prices surged to an 11-month high above $76 a barrel and shrugged off better than expected US jobs growth.
The FTSE 100 closed up 54.9 points, or 0.83 percent at 6,690.1, for a weekly gain of 1.2 percent. Continental European shares also finished higher, even though the strong US job data reinforced the view that the Federal Reserve would not cut interest rates this year.
"The data as it emerged leave the debate regarding the health of the US economy and the outlook on inflation and monetary policy as balanced as it was before. It didn't add anything," said Jeremy Batstone-Carr, head of private client research at Charles Stanley.
Oils added nearly 23 points to the index with Royal Dutch Shell up 2.9 percent and BP adding 1.1 percent. Gas producer BG Group advanced 2 percent. Oil prices are nearing last year's peaks because production disruptions in Nigeria and output cuts by Opec have raised concerns that global supplies are tightening just as demand is picking up from refiners in top consumer the United States.
Shell also benefited from an upgrade by Deutsche Bank. Miners were also in demand, contributing more than 13 points to the index, after Credit Suisse raised its price forecast on precious and base metals, prompting it to increase its price targets for some metal and mining companies, and on sector consolidation talk.
The Daily Telegraph said Rio Tinto, the world's second-biggest miner, was drawing up plans to gatecrash Alcoa's hostile $28.6 billion bid for North American rival Alcan. Rio declined to comment.
The newspaper, without citing sources, said Rio was understood to have engaged Credit Suisse and Deutsche Bank to advise it on a range of options, including a possible bid for Alcan.
BHP Billiton gained 3.7 percent to top the FTSE 100 gainers, while Vedanta Resources tacked on 3.2 percent and Xstrata climbed 3 percent. But Rio was flat, underperforming the sector. "I don't feel with conviction that the market has a great deal more to go, with the FTSE near 6,700. It is coming to the top end of its trading range. I would have been tempted to take a few profits if I was holding shares," said Tim Whitehead, head of portfolio services at Redmayne-Bentley.
Kingfisher slipped 1.3 percent, its lowest level since June 2006, after Lehman Brothers cut its earnings forecasts and price target on the biggest home improvement retailer in Europe and Asia.
"We are cutting our 2008 and above-consensus 2009 estimates for wet June weather and cautious consumer outlook," Lehman said in a note. According to accountancy firm Grant Thornton higher interest rates and the wettest June on record pushed British non-food retailers to their worst quarter in almost two years.
The Bank of England raised interest rates to a six-year high of 5.75 percent on Thursday and said risks to inflation in the medium term were still on the upside. Many analysts expected the BoE to lift rates to 6 percent by year-end.
InterContinental Hotels dipped 1.4 percent after gaining 4.6 percent in the previous two sessions after being boosted by US private equity firm Blackstone Group's $20 billion-plus-debt take-over of Hilton Hotels Corp.
ICI eased 0.8 percent. Britain's Takeover Panel said Akzo Nobel must decide by August 9 whether to make a take-over offer for the maker of Dulux painafter it rejected a take-over approach of 7.2 billion pounds in June.