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* Metro Bank falls on grim outlook
* Bank stocks gain on Bailey's announcement
* FTSE 100 up 0.5%, FTSE 250 adds 1.2%
(Updates to close)
By Shivani Kumaresan and Amal S
Feb 24 (Reuters) - Britain's main stock index recouped early
losses to end Wednesday higher, as gains in commodity-linked and
banking stocks on investor optimism about a post-pandemic
economic recovery outweighed losses in defensive sectors.
After falling as much as 0.8%, the commodity-heavy FTSE 100
index closed up 0.5%, with oil heavyweights BP
and Royal Dutch Shell providing the biggest boost with
gains of 5.4% and 3.3%, respectively.
Mining stocks including Rio Tinto plc, Anglo
American Plc and BHP added between 0.7% and
1.5%, boosted by higher metal prices.
"One of the main drivers for the FTSE over the next few
months is going to be investors' interest in a possible
commodity super-cycle," said Andrea Cicione, head of strategy at
TS Lombard.
"If commodities continued to perform as strongly as they
have over the past few months, well that's going to benefit
disproportionately."
British bank Barclays jumped 3.4%, while other
lenders rose as Bank of England Governor Andrew Bailey said
Britain will resist "very firmly" any European Union attempts to
arm-twist banks into shifting trillions of euros in derivatives
clearing from Britain to the bloc after Brexit.
Defensive plays such consumer staples, healthcare and
utilities were among the top laggards.
The domestically focused mid-cap FTSE 250 gained
1.2% and marked its best day over a week, on hopes that speedy
vaccination will help ease coronavirus restrictions faster.
In company news, Metro Bank fell 9.9% as it posted
a much bigger annual loss and said it expects defaults to rise
through the year as government support measures set in place due
to the COVID-19 crisis are wound down.
Consumer goods maker Reckitt Benckiser shed 1.5% even
as it capped 2020 with the strongest sales in its history, while
Aviva slipped 0.5% as it agreed to sell its 40% stake in
a joint venture in Turkey for 122 million pounds ($173.2
million).
(Reporting by Shivani Kumaresan and Amal S in Bengaluru;
editing by Anil D'Silva and Emelia Sithole-Matarise)
