* Broad-based rally lifts FTSE 1.5 percent
* CIT Group $3 billion rescue boosts sentiment
* Rightmove says UK property price falls have bottomed
By Tricia Wright
LONDON, July 20 (Reuters) - Banks and commodity stocks led a
broad-based rally on Britain's top share index by midday on
Monday, set to be the sixth-straight day of gains, with
sentiment buoyed by a last-minute rescue of U.S. CIT Group
<CIT.N>.
By 1059 GMT, the FTSE 100 <> added 67.32 points, or 1.5
percent, to 4,456.07, after posting its best weekly rise since
early January at Friday's close.
"The main picture that we've seen over the last few sessions
is a market that is just getting more breadth and (is) less
narrow than it was earlier in the year," said Darren Winder,
head of macro and strategy research at Cazenove.
"As it gets more breadth, it gets more momentum, and it can
post further gains from here and obviously put more index points
to the total because these are some of the larger companies
within healthcare and materials and financials that are all
contributing to the rise in the market."
Banks led the gainers in the wake of recent strong corporate
earnings from U.S. peers, with Barclays <BARC.L>, HSBC <HSBA.L>,
Standard Chartered <STAN.L> and Royal Bank of Scotland <RBS.L>
rising 1.3 to 5.3 percent.
Lloyds Banking Group <LLOY.L> was the top gainer, up 7.3
percent, with analysts noting a report in the Sunday Times,
which said it would post a first-half profit.
Investor sentiment was also lifted by U.S. lender CIT
Group's tentative deal with bondholders for $3 billion in rescue
financing, a move which would prevent the firm becoming the
latest casualty in the financial crisis. []
Good gains were also seen from insurers. Friends Provident
<FP.L> gained 2.4 percent after financial buyout firm Resolution
<RSL.L> sweetened its proposed offer for the company, including
a cash element and a commitment on dividends. []
Peers Aviva <AV.L>, Legal & General <LGEN.L>, Old Mutual
<OML.L> and Prudential <PRU.L> put on between 1.7 and 5.7
percent.
Energy stocks were in demand as crude rose a dollar to above
$64 a barrel on Monday, reaching the highest in almost two
weeks.
BG Group <BG.L> rose 1.8 percent, BP <BP.L> added 2.3
percent and Royal Dutch Shell <RDSa.L> climbed 1.7 percent.
Against a backdrop of rising metals prices, miners enjoyed a
rally, with copper <MCU3=LX> hitting a nine-month high.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Eurasian
Natural Resources Corp <ENRC.L>, Kazakhmys <KAZ.L>, Rio Tinto
<RIO.L> and Xstrata <XTA.L> rose between 0.8 and 5.5 percent.
DRUGS UP, TOBACCO SLIPS
Pharmaceutical stocks were also strong, with AstraZeneca
<AZN.L> up 1.3 percent and Shire <SHP.L> adding 0.4 percent.
GlaxoSmithKline <GSK.L> rose 3.3 percent after the success
of its partner firm in a lupus drug clinical trial which, if
turned into a blockbuster drug, could see profits being split
between GlaxoSmithKline and partner Human Genome Sciences Inc.
<HGSI.O>
Tobacco issues were the biggest weight on the blue chips,
with British American Tobacco <BATS.L> and Imperial Tobacco
<IMT.L> down 0.7 percent and 0.5 percent, respectively.
Among individual stocks, Smith & Nephew <SN.L> lost 1.7
percent after Cazenove downgraded its rating on the medical
devices company to "in-line" from "outperform".
On the second tier, the leaderboard was peppered with
housebuilders, after data from property website Rightmove showed
that the falls in property prices in England and Wales over the
past year may have bottomed out.
Bellway <BWY.L> added 5.3 percent, while Taylor Wimpey
<TW.L> rose 5 percent.
Bovis Homes Group <BVS.L> gained 5 percent, given a further
boost by a UBS upgrade to "buy" from "neutral", with the broker
citing its optimism over the continued strengthening of the UK
housing market.
(Editing by Karen Foster)
