FTSE hits 14-month closing high

By David Brett

LONDON (Reuters) - The FTSE 100 share index hit a 14-month closing high on Friday as gains in HSBC and commodity stocks outpaced weaker defensives, with British Airways also up after agreeing to merger terms with Iberia.

The FTSE 100 ended up 19.88 points, or 0.4 percent, at 5,296.38 points -- the highest close since September 2008. The index is up 2.9 percent this week and has rebounded 53 percent since hitting a six-year trough in March.

Heavyweight bank HSBC, up 1.2 percent, added the most points to the index, with traders citing market talk that it may increase its dividend. The stock is up 8.5 percent this week, with investors cheered by strong results released on Tuesday.

Royal Bank of Scotland climbed 0.6 percent, but Barclays, Lloyds and Standard Chartered fell 0.2 to 1.3 percent.

Energy firms were stronger as BofA-Merrill Lynch raised 2010 crude price forecast to $85 a barrel. BG Group, Cairn Energy, Tullow Oil and BP added 0.5-2.1 percent.

"That 5,300 level is remaining elusive for the FTSE, although we do have a couple of high profile fundamentals out at the start of next week," said Anthony Grech, market strategist at IG Index.

"U.S. retail sales figures on Monday and UK inflation data on Tuesday both have the potential to add further evidence of economic recovery, but again any shortfall could leave traders itching to book profits," he added.

Miners were higher, with Anglo American, BHP Billiton and Rio Tinto rising 1 to 1.1 percent. Real estate issues were on investors' wanted lists. British Land, Hammerson, Land Securities and Liberty International gained 2.3 to 3.9 percent.