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UK shares up on firmer commodities, U.S. jobs data eyed

Friday, 5 Oct 2012 | 5:26 AM ET

* FTSE 100 index rises 0.2 percent

* Investors expect strong U.S. non-farms payrolls

By Atul Prakash

LONDON, Oct 5 (Reuters) - UK shares edged higher on Friday, boosted by firm commodity markets but trading in a tight range ahead of what many investors expect to be strong U.S. jobs data.

The FTSE 100 index

has traded in a range of 200 points for nearly a month and rose only 0.5 percent in September. At 0817 GMT, the index was up 11.87 points, or 0.2 percent higher, at 5,839.59 after closing flat on Thursday.

The mining index rose 1 percent. ENRC

was up 2.7 percent, while Rio Tinto

gained 2 percent on expectations of improved demand for metals. The oil and gas index

rose 0.6 percent.

"Earlier this week, we saw the ADP private (U.S.) payroll figure come in much higher than expected and this has helped to boost expectations for today's non-farm payrolls data," Angus Campbell, head of market analysis at Capital Spreads, said.

"The number today is expected to come in at around 115,000 and there are quite a few bullish predictions expecting a figure of more around 150,000. This doesn't seem so optimistic when you consider that the initial jobless numbers have been improving."

According to a Reuters survey, the data due at 1230 GMT is expected to show employers added 113,000 jobs, up from 96,000 in August, with the unemployment rate edging up to 8.2 percent.

"Equity gains are likely to be capped by valuations," Jeremy Batstone-Carr, head of private client research at Charles Stanley, said.

"Although the pace of earnings downgrades has slackened, consensus estimates for 2012 and especially 2013 still look far too high."

The FTSE 100 index traded at 10.7 times its one-year forward earnings, up from 6.6 times in October 2008 but below its 10-year average of 11.5 times, according to Thomson Reuters Datastream.

Among individual movers, luxury goods group Burberry

rose 1.1 percent after investment bank Morgan Stanley upgraded the stock to "overweight" from "equal-weight."

(Additional reporting by Scott Barber; Editing by John Stonestreet)

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Keywords: MARKETS BRITAIN STOCKS/