The FTSE 100 <.FTSE> closed slightly higher on Friday, as a late-session rebound in heavyweight mining stocks pushed it back up above a key technical support level, slightly brightening the outlook for coming sessions.

The rebound came as strong earnings and an upbeat outlook from the world's biggest copper miner reassured investors about the prospects for resources demand, concerns about which had been fanned by weak data and comments from China throughout the week.

Chile's Codelco , said its 2011 pretax profit surged 21 percent from a year earlier and appeared optimistic about the copper market, saying consumption growth could stay at levels above the historical average and sales to China shouldn't drop.

Britain's miners, which had been one of the biggest fallers in the first half of Friday's session, recovered sharply to close 0.9 percent higher <.FTNMX1770>.

The rebound in the basic resources sector, which accounts for around 14 percent of the FTSE 100, helped London's blue-chip index <.FTSE> close up 9.24 points, or 0.2 percent, at 5,854.89 points - just above the 50-day moving average - after falling as low as 5,801.72 during the session.

Anything that comes out of the big guns over there does tend to move a lot of the miners, Steve Asfour, trader at Fox Davies, said.

The market has had a bit of a shake-out. When we were knocking on the door of 6,000, fund managers were a bit nervous to push it higher. But now there has been a fair amount of short covering going on and 5,820 has been a very good support line for the FTSE for the last few months.

Despite the late-session rebound, the FTSE 100 was still down 1.9 percent for the week, its worst showing in three months and potentially offering an attractive entry point for the majority of investors who have so far sat out the 2012 equities rally, as shown by low volumes.

Could asset allocators be tempted to shift money back into equities? In my view there is a good case to be made. Valuations and current allocations tell us that equities remain unloved relative to history, James Follows, head of equities at Vestra Wealth, said.

I'm feeling increasingly happy about the U.S. economy and I remain relaxed about the outlook for China ... If you (are) 90 percent in equities you would hold, if you only have 25 percent you should be buying the dip.

Still up 5 percent since the start of the year, the FTSE 100 is now trading on a 12-month forward price-to-earnings (P/E) ratio of 10.3 - attractive against the long-term average of 12.8 but not looking nearly as cheap as in October when the ratio was around eight, according to Thomson Reuters Datastream.

Investors are still a net 15 percent underweight on UK equities according to a survey by Bank of America Merrill Lynch - roughly in line with their stance on the euro zone but gloomy compared with a net 14 percent overweight on U.S. stocks.

Boosting the case for investment in the UK was a slightly brighter outlook from domestic retailers. John Lewis reported strong weekly sales, adding to cautious optimism fanned the previous day by results from Next and Kingfisher which on Friday translated into a string of broker upgrades. The sector closed up 1 percent <.FTNMX5370> .

The biggest gainer in the FTSE 100 was BT , which rose 5.4 percent after saying would pay down its pension deficit more quickly than previously planned, removing uncertainty over the scheme and raising hopes it will pay more dividends in future.

(Reporting By Toni Vorobyova; Editing by Erica Billingham)