FTSE gains as HSBC buoys banks, oil helps energy

By Amanda Cooper

LONDON, May 12 (Reuters) - British blue-chip shares ended Monday's session in positive territory as crude oil holding near record highs helped energy stocks, while an HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) update supported the banking sector.

The FTSE 100 index .FTSE rose 15.9 points, or 0.26 percent, to 6,220.6 points, having swung earlier between gains of up to 0.8 percent and losses of as much as 0.3 percent.

The index was little moved by data that showed British wholesale inflation rose at a record pace in April, as fuel and food costs soared.

"The one thing about the FTSE 100 is that it's probably not the best reflection of 'UK Plc' economy. It's probably a broader reflection of the global economy," said Keith Bowman, an equity analyst at Hargreaves Lansdown.

"Oils, miners and banks put together make up about 50 percent of the index," he said.

Heavyweight oil stocks rallied as U.S. crude futures CLc1 hovered near record highs. BP (BP.L: Quote, Profile, Research, Stock Buzz) was up 0.9 percent, while Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) rose 0.6 percent. Among the smaller stocks, Cairn Energy (CNE.L: Quote, Profile, Research, Stock Buzz) climbed 3.9 percent.

Also among major gainers was HSBC, Europe's largest bank, which rose by nearly 2 percent, making it the biggest individual positive influence on the FTSE after the company reported a rise in first-quarter profit

HSBC said growth in Asia and elsewhere helped offset a $5 billion hit for bad debts on U.S. home loans. It said it was increasingly likely the U.S. economy would go into recession this year and a recovery in the housing market was unlikely until at least 2009.  Continued...