Kazakhmys approach buoys FTSE; little budget impact

By Michael Taylor

LONDON, March 12 (Reuters) - The FTSE 100 index .FTSE of Britain's top shares ended up sharply on Wednesday, powered by mining stocks that were led higher by takeover target Kazakhmys (KAZ.L: Quote, Profile, Research) which jumped 20 percent.

The blue-chip index closed 86 points or 1.5 percent higher at 5,776.4, shrugging off British Finance Minister Alistair Darling's first budget.

The pan-European FTSEurofirst 300 index also rose, adding to gains on Tuesday when major central banks injected cash into strained credit markets.

Kazakhmys ended 16 percent up after touching a record high when Kazakh mining group Eurasian Natural Resources (ENRC.L: Quote, Profile, Research) (ENRC) said it was considering buying its rival. [ID:nL12721507]

ENRC, which is due to enter the FTSE 100 on March 26 in a quarterly rejig, said it had held discussions with Kazakhmys as it explored possible strategic opportunities following its London flotation in December. ENRC slipped 3.2 percent.

Within the sector, BHP Billiton (BLT.L: Quote, Profile, Research), Rio Tinto (RIO.L: Quote, Profile, Research), Anglo American (AAL.L: Quote, Profile, Research), Xstrata (XTA.L: Quote, Profile, Research), Lonmin (LMI.L: Quote, Profile, Research) and Vedanta Resources (VED.L: Quote, Profile, Research) gained between 2.2 and 5 percent.

Elsewhere the government's latest budget saw growth forecasts cut and borrowings ramped up as the British economy faces its toughest period for the past decade. [ID:nL12448469]

"It's pretty boring," said Peter Dixon, UK economist at Commerzbank. "There is nothing in there to get us very excited. The growth forecast has been downgraded -- we knew that. Public borrowing forecast has been downgraded -- we knew that."