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Britain's FTSE rallies after upbeat U.S. data

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(Globalpost/GlobalPost)

* FTSE up 0.3 percent

* Closes 1st day of month higher for 9th time in row

* US consumer sentiment data helps lift market

* Burberry, BAT among the top risers

* Miners weak on China slowdown worries

By David Brett

LONDON, March 1 (Reuters) - Britain's blue chips rallied at the close on Friday after strong sentiment data out of the United States helped the FTSE 100 to close higher on the first trading day of the month for the ninth month in a row.

The FTSE 100 closed up 17.79 points, or 0.3 percent, at 6,378.60, extending a trend which has seen Britain's benchmark index close higher on the first trading day of the month for 15 out of the last 16 months.

"If you bought on close of last day and sold on close of first day you would have made more than holding over whole period - 18.15 percent versus 14.14 percent," Nick Xanders, who heads European equity strategy at brokerage BTIG.

Upbeat U.S. consumer sentiment data helped. With many feeling the worst of the economic shocks are now in the past, investors are taking heart from more forward looking data such as sentiment indicators.

Consumer stocks, especially those with a broad reach, were among the leading lights on the FTSE 100 with the likes of luxury goods firm Burberry up 2.5 percent and global tobacco firm British American Tobacco up 2.1 percent.

"The FTSE 100 has overcome this morning's PMI disappointment to bounce from the lows - dragged higher by US markets that continue to respond to macro data significantly stronger than that coming out of Europe," Matt Basi, sales trader at CMC Markets, said.

The U.S. economic recovery remains the jewel in the crown for investors as stalling European factories and slowing China leaves the world economy looking to America.

The slowdown in China, however, weighed on the miners where analysts and investors are becoming more concerned about the outlook for earnings.

Kazakh-focussed Kazakhmys fell 4.7 percent as investment banks began cutting recommendations and estimates a day after its profits were hit by worries over rising costs.

Another miner, Xstrata, shed 3.1 percent after commodities trader Glencore pushed back the date for completion of the pair's tie-up for the third time.

Glencore itself was down 2.7 percent.

BANKS STRAIN

Banks, which pared losses towards the close, still ended the day lower with Lloyds Banking Group off 2.2 percent, after news of a new $2.3 billion insurance mis-selling hit.

That helped spur another 3.1 percent loss for fellow part-nationalised lender the Royal Bank of Scotland which said on Thursday it was bowing to political and regulatory pressure to shrink its riskier investment banking arm.

There was further pressure on Lloyds' shares with analysts noting fresh media speculation that the British government, a 39 percent shareholder, may commence its share disposal at 61 pence.

"This is a new 'contrived' break-even number for UK Government accounting which conveniently ignores its average in-price (cost of those shares) of 73.6 pence," broker Investec said in a note.

"All very interesting, but we hardly see the potential market overhang as positive for upside (in Lloyds' shares)."

After the recent rally fuelled by central bank support UBS said from an asset allocation perspective it was now growing more cautious having been "risk-on" since September.

UBS cited fading positive economic data surprises and political risks as reasons for reducing risk as Italy continued to try to solve an crisis after this week's inconclusive election and U.S. politicians were locked in talks to ward off potentially growth curdling budget cuts. (Reporting by David Brett)

http://www.globalpost.com/dispatch/news/thomson-reuters/130301/britains-ftse-rallies-after-upbeat-us-data