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FTSE gains after Yellen comments, Glencore rallies

A worker shelters from the rain as he passes the London Stock Exchange in the City of London at lunchtime October 1, 2008. REUTERS/Toby Melville/File Photo

By Kit Rees and Alistair Smout LONDON (Reuters) - Britain's top share index rose on Friday after Federal Reserve Chair Janet Yellen indicated that a U.S. interest rate rise could come later this year, a relief for investors after last week's hawkish comments from some Fed policymakers. The blue chip FTSE 100 was up 21.15 points, or 0.3 percent, at 6,838.05 points by the close, though it posted a second straight weekly fall. The FTSE 100 hit session highs after Yellen said that the case for a U.S. rate hike had strengthened in recent months, due to improved economic indicators. "The speech itself was always going to struggle to live up to the hype. In the end, Janet Yellen’s words followed a familiar path of non-committal ambiguity," CMC Markets' analyst Jasper Lawler said in a note. Analysts said that they were now looking towards December for a possible U.S. rate hike. “We were expecting that we might be looking at a rate hike in December anyway, and we suspect that we won’t have one before the U.S. presidential elections," Charles Stanley chief investment commentator Garry White said. The FTSE gains were led by a rise in mining stocks, with Glencore bouncing back after results this week. It was up 3.2 percent but remained down for the week as a whole. "GLEN's H1-16 results are encouraging as there is good progress with debt reduction and better visibility on cost reduction & FCF (free cash flow) generation," UBS analysts said in a note. Copper prices also stabilised after falls this week, while the price of zinc hit a 15-month high. In all, miners rose 2.7 percent. The pharmaceutical sector was under pressure for a second straight session since U.S. Presidential candidate Hillary Clinton criticised the pricing of a high-profile drug. Both Astrazenca and Shire fell more than 1 percent. After a strong run, analysts said that the sector was now vulnerable. "Investors are pulling funds from what now seems to be one of the most politically-sensitive industries in the run up to the US presidential election," CMC's Lawler said in a note. The FTSE was unaffected by data showing that GDP was in-line with preliminary readings, and growth held up well ahead of Britain's decision to leave the European Union. Among mid-caps, the Restaurant Group rose 3.6 percent after its results beat expectations, while Amec Foster Wheeler jumped 6.6 percent after an upgrade to "overweight" by Morgan Stanley. (Editing by Louise Ireland)