FTSE has best month in five years

By Dominic Lau

LONDON (Reuters) - The top share index ended flat on Wednesday as investors stayed cautious ahead of an expected interest rate cut in the United States, but still registered its best monthly performance in five years.

Better U.S. economic data, including a slightly stronger pace of growth in the first quarter, helped ease recession fears and lifted sentiment as the FTSE 100 .FTSE closed down 2.1 points, or 0.03 percent, at 6,087.3 after trading down as much as 0.9 percent earlier in the day.

The benchmark index gained 6.8 percent this month, however.

"Investors in the short term will take comfort that perhaps the demise of the U.S. economy that was expected in the first half may not be as bad as some of the investors had feared," said Henk Potts, equity strategist at Barclays Stockbrokers.

"More realistically, investors are perhaps positioning themselves for a much brighter second half of the year," he said.

Home Retail Group (HOME.L) leapt 8.8 percent to top the gainers' list on the FTSE 100 after it reported a 15 percent rise in annual profits, even though it said the outlook for consumer spending was weaker for the new financial year.

Elsewhere in the sector, Marks & Spencer (MKS.L) gained 3.3 percent, Carphone Warehouse (CPW.L) put on 3.5 percent, Next (NXT.L) added 2.1 percent, and Tesco (TSCO.L) advanced 2.7 percent.

The U.S. economy expanded at a 0.6 percent annual rate in the first quarter, matching the fourth quarter's advance and comfortably topping a forecast for 0.2 percent growth in a Reuters polls of economists.