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FTSE set for biggest weekly gain since 2011

Reuters
Updated
  • A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
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    A man walks through the lobby of the London Stock Exchange in London

    A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
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    A man walks through the lobby of the London Stock Exchange in London

    A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
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    A man walks through the lobby of the London Stock Exchange in London

    A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
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  • A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
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    A man walks through the lobby of the London Stock Exchange in London

    A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett
A man walks through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett

By Kit Rees and Alistair Smout

LONDON (Reuters) - Britain's top share index posted its biggest weekly gain since 2011 on Friday, as minutes of a Federal Reserve meeting suggested it was not about to raise interest rates and mining stocks rallied after Glencore cut back zinc production.

Britain's FTSE index was up 41.34 points, or 0.7 percent, at 6,416.16 points at the close, up 4.7 percent for the week, setting its biggest weekly gain since December 2011.

Glencore was among the top gainers, rising 7 percent after it said it would cut 500,000 tonnes of zinc production, or around 4 percent of global supply, in its latest move to counter weak commodities prices.

Glencore, the world's largest producer of zinc, has already taken measures aimed at cutting its $30 billion debt pile by a third. The volatile stock finished the week up 35.9 percent since Monday, its biggest weekly rise ever.

"The zinc output cut means less revenue for Glencore but was seen as a positive step by the company to reduce its worryingly high debt pile," said Jasper Lawler, market analyst at CMC Markets.

As zinc prices surged, other metals prices also rallied, helping Anglo American, Antofagasta and BHP Billiton, up between 3.1 and 7.2 percent. The FTSE 350 mining index was up 4.4 percent.

Analysts cited the minutes of the Fed's September meeting as encouraging investors to get back into equities. The minutes showed the Fed had been wary of raising U.S. rates even before subsequent economic data showed a slowdown in hiring by U.S. employers.

"So dovish was the tenor of the minutes that I don't even think a rate hike in 2015 is a serious option, and indeed the market seems to agree with that," said Jeremy Batstone-Carr, analyst at Charles Stanley. Market pricing suggested the first U.S. rate increase would take place next March, he said.

Sports Direct was down 6.6 percent. It extended losses after the British Insolvency Service said that criminal proceedings had been opened against its chief executive.

The stock had already been in negative territory after being cut to "equal weight" from "overweight" by Morgan Stanley.

"With the earlier downgrade, there are a number of stories putting pressure on the stock all at the same time," said David Madden, market analyst at IG.

(Editing by Larry King)