* Oils up on firmer crude; Tullow Oil rises on new oil finds
* Insurers down, unsettled by AIG sale delay
* Pharmas extend weakness
By Dominic Lau
LONDON, Dec 11 (Reuters) - Britain's leading share index was
0.4 percent higher by midday on Thursday as gains in heavyweight
energy stocks eclipsed weakness in financials and drugmakers.
By 1137 GMT, the FTSE 100 <> was up 16.25 points at
4,383.53, after trading as much as 1.4 percent lower earlier in
the session.
The UK benchmark shed 0.3 percent on Wednesday to snap a
two-day winning run, and is still down 32 percent for the year.
Energy stocks were the top-weighted gainers as crude prices
<CLc1> firmed and after Tullow Oil <TLW.L> announced new oil
finds in Ghana and Uganda, which it expects to boost reserves.
Tullow Oil shares rose nearly 17 percent, while BP <BP.L>,
Royal Dutch Shell <RDSa.L> and BG Group <BG.L> advanced between
1.4 percent and 4.7 percent.
Miners were generally higher, with the FTSE 350 mining index
<.FTNMX1770> up 0.9 percent. Rio Tinto <RIO.L>, Wednesday's big
gainer on cost-cutting moves, rose 5 percent, while Lonmin
<LMI.L>, Xstrata <XTA.L>, Fresnillo <FRES.L> and Kazakhmys
<KAZ.L> were up between 2.1 percent and 8.5 percent.
Bank of England (BoE) policymaker Kate Barker told the
Glasgow-based Herald newspaper that Britain's ailing economy
would start to recover towards the end of 2009, but that it
would be hard to judge how fast that improvement would be.
[]
A UK economist at Commerzbank, Peter Dixon, said: "Most of
the bad news is already in the market. Is it going to get worse?
Sure. The economic news is going to get awful worse.
"But the market will only react though if the numbers
continue to get worse. In another words, the recession is quite
prolonged."
A survey showed British factory orders fell sharply in
December as export orders shrank at their fastest pace in more
than five years. []
Banks were the main drag on the index, with HSBA <HSBA.L>
falling 2 percent, Lloyds TSB <LLOY.L> dropping 3.7 percent and
Royal Bank of Scotland <RBS.L> shedding 4 percent.
INSURANCE PREMIA
Insurers also languished on uncertainty over AIG <AIG.N>
asset sales and after Goldman dropped Aviva <AV.L> from its
"conviction buy" list.
AIG, which is looking to sell assets around the globe to
repay a $152 billion U.S. government rescue package, said
difficult markets may force it to delay divestment plans.
Aviva sagged 2.6 percent, Friends Provident <FP.L> sank 6.3
percent, Standard Life <SL.L> lost 5.9 percent and Legal &
General <LGEN.L> shed 3.1 percent.
"'Tis the season to be realistic," said Felix Riley, head of
binary betting firm ChoiceOdds.
"Domestically, the demise of Woolworths compounds the gloom,
and the slump of the pound against the euro is a damning verdict
by the markets on the UK economy."
Pharmaceuticals came under pressure, extending previous
session's weakness after the European Commission adopted a
package of reforms for the sector, which includes concessions to
companies reselling prescription drugs.
Also, U.S. drug reviewers presented evidence of
life-threatening risks from a class of asthma drugs to an
advisory panel considering whether to recommend limits on
medicines now used by millions.
The inhaled drugs include one of the world's top-sellers,
GlaxoSmithKline's Advair as well as AstraZeneca's blockbuster
Symbicort.
GlaxoSmithKline <GSK.L>, AstraZeneca <AZN.L> and Shire
<SHP.L> slipped between 0.2 and 1.5 percent.
Among mid-caps, Punch Taverns <PUB.L> slumped 5.7 percent on
renewed fears over the group's debt after Charles Winston,
leisure analyst at stockbroker Redburn Partners, advised clients
to sell and put a fair value of nil on the stock.
(Additional reporting by Jon Hopkins; Editing by Andrew
Macdonald)
