FTSE ends higher on the week after shorting ban

LONDON: Britain's top shares rose on Friday, underpinned by a short-selling ban on financial shares by France, Italy, Spain and Belgium, with banks, integrated oil stocks and miners leading the market higher.

After a tumultuous five days, during which it swung in a range of more than 500 points, the FTSE 100 index ended up 157.20 points, or 3 percent, at 5,320.03 on Friday, pulling back earlier losses to record a gain of 1.3 percent for the week.

Buyers came in for banks , boosted by the short-selling ban, despite doubts about the wisdom of preventing the controversial practice, whereby investors look to profit from anticipated price falls.

Barclays , Lloyds Banking Group and Royal Bank of Scotland all enjoyed gains at or near the 5 percent mark.

Investors were also given cause for cheer by modestly upbeat US retail sales data, which offset a weak reading on US consumer sentiment.

As risk appetite improved, gold , a traditional safe haven, fell. This had a negative knock-on effect on Randgold Resources , off 0.2 percent, the sole blue-chip faller.

The market's 'risk-on' mode gave energy firms a lift, with the sector helped too by an opinion from Goldman Sachs that integrated oil stocks were undervalued.

Royal Dutch Shell, among Goldman's top picks in the sector, climbed 3 percent, while BG Group and BP added 4.5 percent and 2.1 percent.

Analysts, however, were steeling themselves for further market volatility in the coming week.

"There's still a lot of nervousness. There's still a lot of concern with respect to sovereign exposure to bad debt, as well as obviously the amount of bad debt that's on banks' balance sheets," Michael Hewson, analyst at CMC Markets, said.

"Until such time as there's some form of clarity on that, we're going to continue to get these wild price swings that we've seen over the past two weeks, because at the moment governments are showing no sign whatsoever of getting a handle on the crisis in Europe."

French President Nicolas Sarkozy and German Chancellor Angela Merkel are scheduled to meet next Tuesday in a bid to address similar criticisms.

Bullish broker sentiment was behind a number of moves on the FTSE 100. Kazakhmys , up 6.3 percent, led the miners higher after an Arbuthnot Securities upgrade on the Kazakh miner to "strong buy" from "buy" on valuation grounds.

Pharmaceutical firm Shire , up 3.9 percent, benefited as UBS lifted its stance to "buy" from "neutral", as it reckons consensus 2013 earnings per share estimates are too low, mostly on overly cautious prospects for the ADHD franchise.

Home improvements retailer Kingfisher climbed 5.9 percent as the same broker added the company to its European Key Call list.

Inmarsat was the star FTSE 100 performer, up 9.7 percent, building on Thursday's gains when Citigroup upgraded the satellite operator to "buy".

"There are a lot of decent stocks that have been sold off because the market's been sold off ... We're getting a little bit of long-term money coming in, and I think the same thing would happen again if the market fell off again," said Will Hedden, sales trader at IG Index.

Among small caps, Trinity Mirror surged nearly 18 percent after the newspaper publisher posted reassuring first-half results, with Numis Securities prompted to upgrade its rating to "buy" from "add", mainly on valuation grounds.

Copyright Reuters, 2011