* FTSE 100 index up 1.6 pct
* Banks and miners among top gainers
* CRH up on infrastructure hopes, Fresnillo falls
(Adds further details, closing prices)
By Atul Prakash
LONDON, March 1 Britain's FTSE 100 share
index surged to a fresh record high on Wednesday, with
commodities-related stocks tracking stronger metals, while banks
gained on expectations of further hikes in U.S. interest rates.
The index closed up 1.6 percent at 7,382.90 points, its
highest level ever, taking gains to more than 27 percent since a
Brexit vote sell-off in June last year.
Banks were prominent among the gainers following signs from
two influential Federal Reserve policymakers that U.S. interest
rates could rise this month, fuelling hopes of an improvement in
New York Fed President William Dudley, a permanent voter on
the U.S. central bank's open market committee and close ally of
chair Janet Yellen, said that the case for tightening monetary
policy "has become a lot more compelling".
"In fact, prospects of significant fiscal spending could
push more Fed members to the hawkish camp," said Ipek
Ozkardeskaya, analyst at London Capital Group, adding that
traders were in hurry to readjust Fed expectations.
The UK banking index rose 2.2 percent as
Standard Chartered, HSBC and Barclays
gained 2.5 to 3.6 percent.
Miners helped the widely-followed British index as copper
climbed to its highest level in nearly a week on concerns about
a shortage of supply and an upturn in manufacturing growth in
top metals user China. Prices of other major metals such as
aluminium, nickel and zinc were also higher.
The sector reacted positive after an official survey showed
that activity in China's manufacturing sector expanded at a
faster rate than expected in February.
The UK mining index rose 3.5 percent, the
biggest sectoral gainer, supported by share price rises of
between 3.1 and 4.9 percent for BHP Billiton, Glencore
, Anglo American and Rio Tinto.
Elsewhere, strong earnings growth and cash generation last
year drove shares in building materials group CRH as it
awaited a further, medium-term boost to infrastructure under
U.S. President Donald Trump. CRH climbed 4.9 percent.
Gold miners, however lost out following a rise in the dollar
on the U.S. rate hike expectations. A firmer dollar tends to
make gold costlier for holders of other currencies and shares in
Fresnillo and Randgold Resources fell 0.9
percent and 1.1 percent respectively.
The broader market showed little reaction to data showing
Britain's factory sector grew more slowly than expected in
February but still looked set to help the economy keep up its
strong, post-Brexit vote momentum in early 2017.
(Additional reporting by Danilo Masoni; Editing by Alexander
Smith, Greg Mahlich)