* Financials rally on Fed Chairman Bernanke comments
* Cadbury up after results, sticks to 2009 targets
* Hammerson up after JPMorgan ups to "overweight"
By Dominic Lau
LONDON, Feb 25 (Reuters) - Britain's leading share index
rose 1 percent by midday on Wednesday to snap a three-day losing
run, as comments from U.S. Federal Reserve Chairman Ben Bernanke
that there were no plans to nationalise major banks boosted
financials.
At 1140 GMT, the FTSE 100 <> was up 36.32 points at
3,852.76, after losing 0.9 percent on Tuesday. The UK benchmark
index is down nearly 13 percent so far this year after tumbling
more than 31 percent in 2008.
Financials got a lift after Bernanke said the government did
not have plans to nationalise major banks at this stage. The
comments also buoyed Wall Street and Asian shares.
In the UK, finance minister Alistair Darling said the UK's
part-nationalised banks should remain owned both by investors
and the government for now so it is eventually easier to return
them to full private ownership.
Royal Bank of Scotland <RBS.L>, Lloyds Banking Group
<LLOY.L>, Barclays <BARC.L>, HSBC <HSBA.L> and Standard
Chartered <STAN.L> advanced between 4.8 and 9 percent.
"It has been a bit of a see-saw week. We are back to where
we started the week. U.S. is certainly dominating direction,"
said Martin Slaney, head of derivatives at GFT Global Markets.
"In the UK, in particular, we are waiting for details of the
assets protection scheme and the RBS results tomorrow."
Japan's Mainichi newspaper said Citigroup <C.N> may sell its
Japanese investment bank in addition to its Japanese brokerage,
seeking a better price as the faltering U.S. lender sheds assets
globally.
Insurers rebounded after a recent battering. Aviva <AV.L>
surged 10.3 percent and Old Mutual <OML.L> gained 7.4 percent.
Oil producers were another standout sector on the upside,
with Royal Dutch Shell <RDSa.L>, BG Group <BG.L>, Tullow Oil
<TLW.L> and Cairn Energy <CNE.L> up between 0.3 and 1.4 percent.
Miners were also firmer. But Randgold Resources <RRS.L> was
down after trading ex-dividend.
Cadbury <CBRY.L> advanced 2.6 percent after the
confectionery group took a relatively upbeat view on demand for
its products ranging from Daily Milk chocolate to Trident gum.
British Airways <BAY.L> climbed 4.8 percent. Spain's El
Economista newspaper said the airline would accept a 55 percent
stake in an enlarged company resulting from its planned merger
with Spanish carrier Iberia <IBLA.MC>.
Hammerson <HMSO.L> rose 7.8 percent after JP Morgan upgraded
the stock to "overweight" from "neutral", citing confidence in
its ability to weather brutal UK property market conditions.
Peers British Land <BLND.L>, Land Securities <LAND.L> and
Liberty International <LII.L> put on 5.3 to 7.1 percent.
SHORT-LIVED RALLY?
"It's going to be short-lived. There is still so much
uncertainty. We are into a relief rally because of the ...
statement by Ben Bernanke yesterday in the hope that all will
come right on the back of the banking bailout," said David Buik,
senior partner at BGC Partners.
"I believe everybody's endeavour is absolutely first class
but nobody has a clue on how much it's going to cost and how
long it's going to take. You will see equity markets bouncing
like a cork in a bath in the next two to three months."
UK's economy shrank at its fastest pace since 1980 in the
last three months of 2008, unrevised official figures confirmed,
as households cut spending at the sharpest rate since 1991.
Bank of England Monetary Policy Committee member Andrew
Sentance was quoted as saying British interest rates could still
fall further but more reductions may not have a massive impact.
Reckitt Benckiser <RB.L> eased after going ex-dividend.
Defensive drugmakers were also down, with GlaxoSmithKline
<GSK.L> and AstraZeneca <AZN.L> off 0.8 to 1.5 percent.
