* FTSE rises 0.4 pct
* Banks gain after better-than-expected Barclays results
* Oils, miners rise, tracking higher commodity prices
By Atul Prakash
LONDON, Aug 7 (Reuters) - Britain's blue-chip index was up
0.4 percent midday on Thursday ahead of the Bank of England's
rate decision, as firmer commodity prices lifted miners and oil
stocks and banks rose after Barclays <BARC.L> half-year results.
By 1042 GMT, the commodity-heavy FTSE 100 <> was up
21.6 points at 5,507.7, after gaining 0.6 percent in the
previous session. But the UK benchmark index has lost nearly 15
percent this year after five consecutive years of gains.
Oils and gas producers were the top sectoral gainer, helped
by crude prices, which recovered from three-month lows as supply
concerns returned to centre stage.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas producer BG Group
<BG.L>, Cairn Energy <CNE.L> and Tullow Oil <TLW.L> added
between 1.1 and 3.6 percent.
Banks gained as Barclays' <BARC.L> first-half profits beat
forecasts and investors were cheered by stronger-than-expected
revenue growth and capital position, and good cost control.
Barclays rose 3 percent, Royal Bank of Scotland <RBS.L>
added 1.4 percent, HBOS <HBOS.L> was up 2.7 percent, and Lloyds
TSB <LLOY.L> gained 3.1 percent.
"Barclays' results seem to have been relatively well taken,"
said Roger Cursley, UK strategist at Investec. "People are
taking money out of the resources sector generally and closing
short positions particularly in the financials and credit market
sensitive areas."
"But I am not sure that underlying sentiment has improved
greatly. There is still deteriorating economic news. Rather than
people actively chasing the stocks for good news, I think they
are just unwinding the risk positions."
Investors remained cautious due to poor global economic
growth, financial market troubles and falling house prices.
British house prices fell at a record annual rate in July to
their lowest level in two years, data from Britain's biggest
mortgage lender HBOS showed, as the outlook for the economy
darkened. []
The market awaited the Bank of England's rate decision at
1100 GMT. The bank is seen keeping rates on hold at 5 percent,
as it is caught between strong inflationary pressures and the
need to guard against deteriorating growth. The European Central
Bank is due to announce its rate decision at 1145 GMT.
INSURERS SUFFER
Insurers suffered because of the credit crisis, sparked by
losses on U.S. subprime mortgages. Falling stock markets have
affected them since many of them hold their assets in equities.
British insurer Friends Provident <FP.L> fell 4 percent
after a 20 percent drop in first-half profit, at the low end of
expectations, as pensions, protection and investment sales fell.
"The insurers are now bearing the consequences of the
financial markets crisis. It's not surprising," said Ralf
Dibbern at M.M. Warburg.
Prudential <PRU.L> fell 1.7 percent, and Standard Life
<SL.L> dropped 1.5 percent. But RSA Insurance Group <RSA.L> rose
1.5 percent after a 9 percent rise in first-half operating
profit.
Miners gained with a rise in base metals prices. BHP
Billiton <BLT.L>, Anglo American <AAL.L>, Vedanta Resources
<VED.L>, Antofagasta <ANTO.L>, Eurasian Natural Resources
<ENRC.L> and Rio Tinto <RIO.L> rose between 1.9 and 6 percent.
Xstrata <XTA.L> rose 1.4 percent. The miner unveiled a $10
billion takeover bid on Wednesday for the world's third-biggest
platinum producer, Lonmin <LMI.L>.
Shares in South Africa-focused Lonmin, which said it would
vigorously contest the bid approach, were down 0.6 percent.
(Additional reporting by Dominic Lau and Patrizia Kokot,
editing by Will Waterman)
