London - Hopes for faster economic growth worldwide could prompt investors to buy Rio Tinto, BP Amoco and other stocks that stand to benefit from rising commodity prices.
Banks may decline as the prospects for a stronger UK economy could delay further interest rate cuts.
"Anticipation of better earnings is driving the price (of cyclical stocks)", said Simon Melluish of Gartmore Investment Management in London. "This sector is relatively cheap compared with the earnings prospects."
The FTSE 100 index rose 54,6 points, or 0,84 percent, to 6552,2 points on Friday for a gain on the week of 1,9 percent. The oil and gas sub-index of the FTSE 350 led gains over the week, adding 7,8 percent.
Rio Tinto, the world's largest mining company, paced gains among other mining companies, climbing 8,2 percent in the past four trading sessions.
Lloyds TSB Group, Barclays and other banks could decline if the Bank of England's monetary policy committee, which meets on Wednesday and Thursday, leaves its benchmark interest rate unchanged.
The central bank has reduced the benchmark repurchasing rate six times since October by a total of 225 basis points to 5,25 percent.
Fifteen of 19 economists in a Bloomberg News survey expected the committee to leave interest rates unchanged, while four said the bank would trim borrowing costs another 25 basis points.
The scope for further UK interest rate cuts was limited, as the economy was growing at a faster rate than previously estimated, possibly fuelling a rise in inflation next year, a study showed.
The UK economy was likely to grow 1,2 percent this year, more than the 1 percent forecast three months ago, as business and consumer confidence picked up, said the National Institute of Economic and Social Research. Annual growth should reach 2 percent by the end of the year and rise further in 2000.
Still, some analysts expect the central bank to cut interest rates once more in 1999, given lower forecasts for growth and demand in Europe and benign inflation in the UK. - Bloomberg