(Refiles to correct percentage change in bullet point)
* FTSE gains 1.3 pct, lifted by miners, oils
* Britain's cabinet reshuffle has little impact on stocks
* Rio Tinto cancels proposed Chinalco tie-up
* Market eyes U.S. non-farm payrolls
By Catherine Bosley
LONDON, June 5 (Reuters) - Britain's top share index gained
1.3 percent towards midday on Friday ahead of U.S. jobs data,
lifted by miners after Rio Tinto <RIO.L> scrapped its proposed
$19.5 billion tie-up with Chinalco.
British Prime Minister Gordon Brown's political woes, which
have prompted him to reshuffle the cabinet, failed to dent the
index, though they drove sterling <EURGBP=> to a two-week low
against the euro. []
At 1037 GMT, the benchmark FTSE 100 <> index was up
56.73 points at 4,443.67. The bluechip index closed up 3.52
points on Thursday at 4,386.94, and has rallied 29 percent since
its low for the year on March 9.
Global miner Rio Tinto will launch a heavily discounted
$15.2 billion rights issue in lieu of its deal with the Chinese
state-owned metals firm. []
Rio and BHP Billiton <BLT.L>, the world's second and third
largest iron ore miners, have also agreed to combine their major
Australian operations into a 50-50 joint venture.
[]
"It's rallying on the back primarily on the Rio Tinto deal.
That's spurred investors on a bit," said Angus Campbell, head of
sales at Capital Spreads, adding that the market was awaiting
the U.S. non-farm payrolls data, due at 1230 GMT.
Heavyweight miners led the charge, adding 33 points to the
index, with and Anglo American <AAL.L> and Xstrata up 4.5 and
1.9 percent respectively. Rio and BHP were the day's top risers,
jumping 11.1 and 8.2 percent respectively.
"The equity market seems to be standing alone and not really
taking all that much direction from what's happening," Campbell
said of British politics. "The link between Gordon Brown and
financial markets has been more on the bond and currency side."
Oil majors were also stronger, with Royal Dutch Shell
<RDSa.L> gaining 1.8 percent, BP <BP.L> 0.6 percent, and BG
Group <BG.L> 2.7 percent.
Pharmaceuticals were also stronger, with AstraZeneca <AZN.L>
up 0.8 percent and GlaxoSmithKilne <GSK.L> up 1.5 percent.
BRITISH POLITICS
Britain's work and pensions secretary James Purnell on
Thursday became the third senior minister to quit the
government, attracting extra attention because of his call for
Brown to quit. []
That compounded Brown's political difficulties just as polls
were closing in local and European elections that are expected
to result in hefty losses for the Labour party, whose popularity
has plummeted in the wake of an expenses scandal.
Campbell said sentiment among equity investors was very much
against Brown, and that his resignation would not depress stocks
for long and might even lift them.
"If any prime minister resigns, generally you get a
knee-jerk reaction sell-off in equities," he said. "But in this
instance it would probably be welcomed."
Finance minister Alistair Darling, who has been one of the
key figures in battling Britain's recession, will keep his job
in the reshuffle, a senior government source said.
[]
The market is eyeing the U.S. non-farm payrolls <USNFAR=ECI>
for further clue on the health of the world's largest economy.
Economists expected 520,000 job losses for May, down from
539,000 in April.
The U.S. unemployment rate is seen rising to 9.2 percent in
May from 8 percent in April.
Banks were mixed, with Barclays <BARC.L> gaining 2.7 percent
but HSBC <HSBA.L> dropping 0.7 percent and Lloyds Banking Group
<LLOY.L> trading flat.
(Editing by Rupert Winchester)
