* FTSE 100 gains 1.4 percent on first session of 2013
* Miners lead advance as copper price jumps
* Banks in demand; Barclays helped by target hike
* Wm.Morrison blighted by negative broker comment
LONDON, Jan 2 (Reuters) - Britain's top share index jumped
higher on the first trading session of 2013 after U.S. lawmakers
approved a deal preventing massive tax hikes and spending cuts,
boosting the outlook for the new year.
The Republican-controlled House of Representatives late on
Tuesday finally approved a bill that will raise taxes on top
U.S. earners, fulfilling President Barack Obama's re-election
promise and avoiding the "fiscal cliff" of $600 billion in
broad-based tax hikes and spending cuts which threatened to drag
the U.S. economy into recession.
At 0832 GMT, the FTSE 100 index was up 80.39 points, or 1.4
percent, at 5,978.20, having ended a thinly traded half-day
session on Monday, New Year's Eve down 0.5 percent as traders
awaited news on the negotiations.
"Investors are trading with a sense of relief this morning
after lawmakers in Washington agreed on a compromise to avoid
the fiscal cliff that has been the dominant theme in equity
markets since the Presidential elections back in November," Mike
McCudden, Head of Derivatives at stockbroker Interactive
"There will no doubt be a few more twists and turns in the
days ahead as the bears pour over the detail of the compromise
that has been struck on Capitol Hill but for now investors have
the concrete news they were hoping for," McCudden added.
Asia stocks rose strongly, copper prices hit a
two-week high, and Brent crude reached a one-month peak
on Wednesday after the deal, with upbeat manufacturing data from
top commodities consumer China also helping.
China's official manufacturing purchasing managers' index
held steady in December at 50.6, matching November's seven-month
high, adding to evidence that the world's second-largest economy
was headed towards a steady revival in growth.
Miners led the blue-chip gainers, contributing
almost 20 points of the FTSE 100's advance, boosted by the jump
in commodity prices.
Banks were also in demand, with Barclays
the top blue-chip gainer, up 4.0 percent, with traders
saying the stock was also helped by a price target hike from
Investec Securities to 285 pence, up from 260 pence.
There were just two blue chip fallers, with WM Morrison
the worst off, down 0.7 percent, with the food retailer
impacted by some negative broker comment, including a cut to
estimates and its price target by Jefferies International.
"Recent market share updates have highlighted soft trading
momentum at Morrisons. We believe this likely reflects consumers
trading down to discounters and continued online share shift. We
now assume Christmas LFL sales (to be reported on 7 January) to
have fallen by 2.8 percent, prompting a 3/4 percent cut to
mid-term estimates and a reduction in our 2013 target ambition
to 310 pence," Jefferies said in a note.
British American Tobacco, was the only other FTSE
100 faller, down 0.6 percent.
Ex-dividend factors clipped 0.27 points off the FTSE 100
index on Wednesday, following a price adjustment by market
makers, with credit checking firm Experian trading
without entitlement to its latest dividend payment.
Although the market mood seemed euphoric as 2013 kicked off,
commentators were still cautious for the near term.
"It's only a matter of time before market participants lose
their buzz as U.S. lawmakers will have to reconvene to address
the remainder of unresolved issues. Judging by the disruptive
game of brinkmanship US lawmakers played in the final weeks of
2012, markets have lost their trust in U.S. politicians," Joe
Rundle, head of trading at ETX Capital said.
(Reporting by Jon Hopkins; Editing by Toby Chopra)