LONDON British shares gained on Friday, led by BT (BT.L) as investors cheered the resolution of a long-running regulatory battle over its broadband unit.
The blue-chip FTSE 100 .FTSE ended up 0.4 percent, bouncing back from Thursday's losses.
Britain's biggest telecoms company BT was the top blue-chip gainer, up 3.7 percent after it announced it would legally separate its Openreach broadband unit. That ends two years of tension with regulator Ofcom over transparency in the company.
"We see this as positive for investor sentiment on BT in terms of removing a notable overhang, an absence of negative surprises, and avoiding a prolonged period of uncertainty had Ofcom taken its case to the European Commission," said analysts at UBS, who have a 'neutral' rating on the stock.
Shares in BT, however, were still nearly 10 percent off their level prior to the company admitting to bad accounting in its Italian division in late January.
Oil & gas stocks were the top sectoral gainers. Oil trader Glencore (GLEN.L) and producer Royal Dutch Shell (RDSa.L) both rose more than 1 percent, but came off highs as oil prices reversed earlier gains in a volatile session.
A strong jobs report in the U.S., which further cemented expectations of a Federal Reserve rate hike next week, helped lift the FTSE up as much as 0.7 percent but the index came off highs as crude prices pulled back.
Insurer Esure (ESUR.L) was up 7.9 percent, the top mid-cap gainer, and hit a record high after it reported an 18 percent jump in full-year profit on strong premiums.
Peer JRP (JRP.L) ended flat as a rally that followed solid results and brought the stock to hit its highest level since January 2016 fizzled out.
Specialist lender Aldermore (ALD.L) fell 7.4 percent after it said it raised 113.7 million pounds through a share placing.
Britain's largest listed property developer, Segro, (SGRO.L) fell 5.6 percent after announcing a rights issue to buy the remaining stake in the Airport Property Partnership joint venture.
"A £556m 1 for 5 rights issue at 345p, representing a 25 percent discount to the 485p theoretical ex-rights price, nevertheless overfunds this purchase and seems opportunistic," said Liberum analysts.
Strong manufacturing data helped support gains. British factory output had its strongest growth in nearly seven years in late 2016 and early 2017, data showed, suggesting the manufacturing sector got a boost from sterling's fall.
(Reporting by Helen Reid; Additional reporting by Danilo Masoni; Editing by Susan Fenton and Pritha Sarkar)