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* FTSE 100 closed 0.5 pct higher
* Mid-caps and small-caps hit all-time highs
* Banks, insurers lead gains after Yellen comments
By Helen Reid
LONDON, Feb 15 Britain's top share index climbed
to a new one-month high on Wednesday as investors bet on
financial stocks after U.S. Federal Reserve Chief Janet Yellen's
hawkish tone suggested U.S. interest rates would rise.
A rally in mining shares on the back of stronger metals
prices also lent some support to the broader stock market.
The blue-chip FTSE 100 index closed 0.5 percent
higher after setting its highest level since mid-January.
Both the mid-cap and small-cap indexes hit
all-time highs, maintaining momentum from Tuesday's session.
Acacia Mining was among top mid-cap gainers, up 3.5
percent, after Credit Suisse raised its rating on the stock to
The UK banking index rose 1.5 percent to an
18-month high, helped by a 1.2 to 2.1 percent rise in RBS
, Standard Chartered, Barclays. HSBC
and Lloyds after Yellen said the Fed would
likely need to raise rates at its next meeting.
Higher interest rates translate into higher margins for
banks, which have been under pressure from a "lower for longer"
"Hints at higher interest rates, a positive for lending
margins, propelled bank shares higher. Lenders with a US
presence including Barclays and HSBC were top risers on the FTSE
100," said Jasper Lawler, analyst at London Capital Group.
The mining index, up 0.5 percent, was also
among the top gainers. Shares in BHP Billiton, Rio Tinto
and Anglo American advanced 0.3 to 2 percent.
Elsewhere, construction company Ashtead was up 2.5
percent, while insurers Prudential and Legal & General
increased more than 1 percent.
Tour operator TUI was the biggest loser on the
index, down 7.2 percent on profit taking after its results led
to a jump on Tuesday. The stock erased its gains of the previous
Gambling firms Ladbrokes and William Hill
were under pressure, however, down 3.2 and 2.8 percent, after
HSBC cut its ratings on both stocks to "reduce" from "hold".
"A consumer downturn isn’t certain, but we analyse the bear
case given the risks and conclude that, while the online market
could remain flat, retail revenues could decline ... and
operators could face EBITDA downgrades,” HSBC analysts said.
NEX Group, a brokerage which reported higher
earnings on volatile markets after Donald Trump's election as
U.S. president, was also down 4 percent.
(Additional reporting by Atul Prakash and Kit Rees; Editing by
Janet Lawrence and Hugh Lawson)