* Oils, miners gain with firmer commodity prices
* Banks mixed; RBS falls as divestments expected
* British Airways weak ahead of results due Friday
By David Brett
LONDON, Nov 2 (Reuters) - Britain's top share index rose 0.6
percent in mid-session trade on Monday supported by gains from
miners and oils after bullish economic data, which offset weaker
defensive stocks.
By 1205 GMT the FTSE 100 was up 31.71 points at 5,076.26,
having fallen 1.8 percent on Friday, notching up its largest
weekly fall, at 3.8 percent, since March.
The index fell 1.7 percent overall in October, the first
monthly drop since June but is still up about 46 percent since
its March low.
Miners were the top gainers boosted by a rise in copper,
which was underpinned by strong purchasing managers data from
both the UK and China, highlighting that a recovery in demand is
well underway.
In the UK the CIPS/Markit purchasing managers index of
manufacturing activity rose at its fastest rate in two years in
October and new orders rose at their fastest in almost six years
as firms started rebuilding their stocks. []
The news came on the back of HSBC's China Purchasing
Managers' Index (PMI), which rose to an 18-month high in October
of 55.4 from 55.0 in September, pointing to sustained strength
in the country's fast-growing manufacturing sector.
Rio Tinto <RIO.L>, BHP Biliton <BLT.L>, Xstrata <XTA.L>,
Anglo American <AAL.L>, Kazakhmys <KAZ.L> and ENRC <ENRC.L>
gained 1.8 to 5.6 percent.
Gold miner Randgold Resources <RRS.L> was one of the top
FTSE 100 risers, up 4.5 percent after it agreed with AngloGold
Ashanti to buy an additional 20 percent in the Moto gold project
in the Democratic Republic of Congo for about $113.6 million.
Energy majors were also in demand as the price of crude oil
<CLc1> rose, with BG Group <BG.L>, BP <BP.L> and Royal Dutch
Shell <RDSA.L> adding 0.4 to 1.9 percent.
However, Anthony Grech, a market strategist at IG Index said
the index's moves merely looks like posturing ahead of more
important data due out towards the end of the week.
"With the Bank of England tipped to extend quantitative
easing at their meeting later in the week and the US non-farm
payrolls (employment data) due on Friday there's no shortage of
scope for further volatility to be seen in the near term," he
said.
"For the time being there seems to be quiet confidence that
last week's correction may be at an end," Grech added.
RBS/LLOYDS FALL
Royal Bank of Scotland topped the blue chip fallers, down
7.8 percent, after the part-nationalised lender said talks with
the European Commission as competition regulator over its state
aid will include some divestments not initially contemplated.
Lloyds Banking Group, also part-owned by the government,
fell 3.5 percent as investors awaited developments with regards
to a planned capital raising.
Other banks were mixed with Barclays <BARC.L> and
heavyweight HSBC <HSBA.L> up 1 percent each, while Standard
Chartered fell 0.1 percent.
Defensive stocks such as pharmaceuticals and tobaccos
weighed most on the index as some appetite for risk returned.
AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L> and Shire fell
1.2 to 1.6 percent, while British American Tobacco <BATS.L> lost
0.5 percent following results from all four last week.
Among individual stocks, British Airways <BAY.L>, which
along with retailer Marks & Spencer <MKS.L> and hedge fund
operator Man Group <EMG.L> reports results this week, fell 2.8
percent. Analysts expect the ailing airline to report widening
second-quarter losses.
British Airways shares also came under pressure after
results from European budget airline Ryanair <RYA.I>
disappointed due to a lack of upward revisions to its full-year
profit forecasts.
U.S. stock index futures pointed to a higher open on Wall
Street on Monday, signalling a rebound after the previous
session's steep losses, with futures for the S&P 500 <SPc1>, Dow
Jones <DJc1> and Nasdaq 100 <NDc1> up 0.4-0.6 percent.
The U.S. ISM report for October, plus September pending
homes sales and construction spending numbers should attract
attention later in the session.
(Reporting by David Brett; Editing by Greg Mahlich)
