(corrects GMT time in second graph)
* Miners in demand; Fresnillo gains on upgrade
* Banks firmer; BoE interest rate decision awaited
* Oils up; crude off seven-week low
* Defensives weak as risk appetite returns
By David Brett
LONDON, July 9 (Reuters) - Britain's leading share index
gained 0.8 percent in midday trade on Thursday with miners,
banks and oils rebounding from the previous session's losses.
By 1014 GMT, the FTSE 100 <> index was 32.88 points
higher at 4,173.11 after closing down 46.77 points, or 1.1
percent on Wednesday at its lowest close in more than two
months.
"We're being driven by what's happening to the oil and
mining stocks and it all seems to be inversely correlated to
what's happening with the dollar," said GFT Global market
strategist David Morrison.
The dollar dipped on Thursday as some risk appetite returned
to the forex markets after an International Monetary Fund report
late Wednesday said the global economy is slowly starting to
pull out of a deep recession. []
Miners were the FTSE's top performers following Wednesday's
sell off, encouraged by earnings news from Alcoa <AA.N>.
After the U.S. market close, aluminium giant Alcoa reported
a smaller-than-expected loss that gave a positive tone to the
start of the second-quarter earnings season.
"The corporate earnings season in the U.S. is going to be
important and the next two to three weeks could be a see-saw
time," said Morrison.
Anglo American <AAL.L>, Vedanta Resources <VED.L>, Kazakhmys
<KAZ.L>, Antofagasta <ANTO.L>, Rio Tinto <RIO.L>, BHP Billiton
<BLT.L> and Xstrata <XTA.L> gained between 3.3 and 5.3 percent.
All of Anglo American's leading institutional shareholders
turned down Xstrata's <XTA.L> proposed 140 billion pounds
nil-premium merger of equals, The Times reported.
Silver miner Fresnillo <FRES.L> was the top FTSE 100 gainer,
up 9.6 percent as Citigroup upgraded its rating to "buy" from
"hold".
The Bank of England is expected to expand its 125 billion
pound quantitative easing programme and keep interest rates at
their record low of 0.5 percent when it announces the outcome of
its latest monetary policy committee meeting at 1100 GMT.
[]
Banking issues found good support, rallying once more
following recent falls, with Royal Bank of Scotland <RBS.L>,
Lloyds Banking Group <LLOY.L>, Barclays <BARC.L>, Standard
Chartered <STAN.L> and HSBC <HSBA.L> up 0.3 to 3.5 percent.
OILS RALLY
Oil producers gained as the price of crude bounced back from
a seven week low. BG Group <BG.L>, BP.L <BP.L> and Royal Dutch
Shell <RDSa.L> added between 0.2 and 1 percent.
Oil rose by more than $1 on Thursday to edge back above $61
a barrel, halting a six-session losing streak which has seen
prices decline by 15 percent on concerns about the timing of any
economic recovery.
Retailers moved higher boosted by positive comment from
Citigroup, with Marks & Spencer <MKS.L> standing out, up 2.8
percent after the broker raised its rating to "buy" from "hold".
Peers Next <NXT> and Kingfisher <KGF.L> gained 3 and 2.1
percent, respectively.
A broker upgrade also gave a lift to motor insurer Admiral
Group <ADML.L>, up 3.6 percent, with Banc of America-Merrill
Lynch hiking its stance to "buy" from "neutral". []
Defensive issues were the main fallers as an element of risk
appetite returned to the market, with drugs, drinks and tobaccos
the worst performing sectors.
Among them, Shire <SHP.L>, AstraZeneca <AZN.L>, and
GlaxoSmithkline <GSK.L> lost 0.6 to 1.2 percent, while Diageo
<DGE.L> shed 0.9 percent and Imperial Tobacco <IMT.L> fell 0.2
percent.
(Editing by Elaine Hardcastle)
