* FTSE 100 up 2.2 percent
* BP higher as the oil major rules out cash call
* Miners rise with firmer metal prices
By David Brett
LONDON, July 6 (Reuters) - Britain's top shares rebounded
sharply by midday on Tuesday, led by bargain hunters boosting
commodity stocks and banks, with BP <BP.L> up on a relief rally
as the oil major ruled out a share issue.
By 1039 GMT, the FTSE 100 <> was 108.23 points, or 2.2
percent, higher at 4,931.79 after falling 0.3 percent on Monday.
But underlying investor nervousness on the state of the
global economic recovery cost the blue-chip index 4.1 percent
last week, and 13.4 percent over the second quarter of 2010.
BP <BP.L> rose 3.5 percent as the British oil major ruled
out a share issue and on persistent talk of sovereign wealth
fund interest, while its Gulf of Mexico oil slick spread to the
Texas coast. []
"Today's report that BP won't be issuing any more shares has
calmed any nerves that its value would be diluted and kept the
bargain hunters happy," said David Jones, chief market
strategist at IG Index.
RBS also helped the oil major's cause by raising its rating
to "buy" from "hold", saying BP's shares have fallen 100 pence
per share more than its base case scenario, with it's value
almost halving since the oil spill started in April.
In the energy sector, Tullow Oil <TLW.L> was also a
stand-out gainer, up 3.6 percent, after the oil explorer said it
expected Ugandan government approval imminently for a deal which
will allow it to begin a landmark oil development in the
country.
BANKS BOOST
Banks, big fallers on Monday, provided firm support as
investor anxiety about the possibility of a double-dip recession
ebbed. Barclays <BARC.L> added 6.1 percent, while Standard
Chartered <STAN.L> put on 3.2 percent.
Miners, which were also weak on Monday, rallied. Xstrata
<XTA.L> and Kazakhmys <KAZ.L> added 6.0 and 6.4 percent
respectively.
"In isolation (the FTSE gain) all looks very positive,
however, many traders are still cautious at the moment and not
quite believing this strength is the start of a real recovery,"
said Jones At IG Index.
Britain's service sector enjoyed its strongest growth for
two years over the past three months and manufacturing grew
strongly, but tougher times may be ahead as firms are gloomier
about the future, a survey suggested on Tuesday. []
And new car registrations in Britain rose 10.8 percent in
June to 195,226 vehicles, their 12th successive monthly
increase, according to the Society of Motor Manufacturers and
Traders. []
Among the mid-caps, UK infrastructure group Balfour Beatty
<BALF.L>, British housebuilder Persimmon Plc <PSN.L> and
Spirax-Sarco Engineering Plc <SPX.L> rose between 3.1 and 6.6
percent after issuing upbeat trading updates, easing concerns
over the stability of future corporate earnings.
U.S. stocks futures pointed to a higher open for Wall Street
later on Tuesday as the market resumes trading after a holiday
on Monday.
Investors will keep an eye out for the June U.S. ISM
non-manufacturing report and employment index, both due at 1400
GMT, for further clues to the state of the global economy.
(Editing by Jon Loades-Carter)
