By Simon Kennedy
LONDON (Dow Jones)--U.K. shares made gains to close out the trading week, with several retailers climbing after broker upgrades and home builders gaining after a survey showed a surprising jump in house prices.
Oil and gas issues also rose, on the rise as crude-oil prices extended strong gains in the Thursday session. Shares of Royal Dutch Shell (RDSA) climbed 2% and BP (BP) added 1.4%.
Gains in metals prices also helped boost the mining sector, with BHP Billiton (BHP) up 4.1%.
Among retailers, shares of bellwether Marks & Spencer climbed 2.3% after HSBC upgraded the company to neutral from underweight.
Rival department-store operator Debenhams saw its shares move 4.2% higher after it was upgraded to buy from neutral at Goldman Sachs as part of a reshuffle of several European retailers.
Sports Direct also gained, up 6% after Goldman upgraded it to neutral from sell.
"As the economic climate stabilizes, we believe that investors may look through current earnings and assess companies on the basis of mid-cycle profitability," analysts at Goldman said.
London's benchmark FTSE 100 index rose 54.61 points, gaining 1.2% to 4,442.15 to put the gauge's advance for the month at about 4.6%.
Other major European markets were also mostly higher in Friday's action, though they pulled back from highs after U.S. data showed business activity in the Chicago region contracted at a faster pace in May, surprising analysts who had expected an improvement.
Shares of U.K. home builders got a boost after a survey by building society Nationwide reported a 1.2% increase in U.K. house prices in May.
Nationwide said that it's too early to say the market is definitively turning but that May's results provide further evidence of some improvement in housing market conditions.
"The combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet. Nonetheless, the improvement in house price trends is consistent with signs of stabilization in several other economic indicators," said Martin Gahbauer, the group's chief economist.
Among house builders, shares of Persimmon rallied 5.9%, Taylor Wimpey climbed 5.1% and Redrow added 3.3%.
The British pound also got a boost after the Nationwide survey, gaining around 1% at $1.6092.
Among relatively few decliners seen in Friday's dealings, shares of water utility Severn Trent dropped 1.8%. The company said it swung to a net loss of 57.8 million pounds ($92.6 million) in the year ended March 31, largely due to a deferred tax charge.
Services Desk; Dow Jones Newswires; +44-20-7842-9319/9274