(Repeats to reach more customers)
* FTSE 100 up 1.5 pct
* Vodafone rebounds after announces share buyback programme
* Lower crude prices ease inflationary concerns, banks rise
By Dominic Lau
LONDON, July 23 (Reuters) - Britain's top share index rose
1.5 percent by midday on Wednesday as Vodafone <VOD.L> gained
after announcing a share buyback programme, while lower oil
prices eased inflation fears, lifting banking stocks.
By 1032 GMT, the FTSE 100 <> was up 78.6 points at
5,442.7, after losing 0.7 percent on Tuesday.
Index heavyweight Vodafone advanced 2.5 percent, recovering
some of the previous session's steep losses, after the mobile
phone giant announced a surprise 1 billion-pound ($2 billion)
share buyback programme. []
Vodafone shares slumped almost 14 percent on Tuesday after
the group said its full-year revenue would be at the bottom of a
previously stated forecast.
Oil shares slipped as crude prices <CLc1> fell. BP <BP.L>,
Royal Dutch Shell <RDSa.L>, gas producer BG Group <BG.L> and
Tullow Oil <TLW.L> shed 0.2 to 0.7 percent.
Banks were the biggest sectoral gainer, with HBOS <HBOS.L>
soaring more than 10 percent on market talk of bid interest from
Spanish rival BBVA <BBVA.MC>, traders said.
Both HBOS and BBVA declined to comment.
Barclays <BARC.L>, HSBC <HSBA.L>, HBOS <HBOS.L>, Lloyds TSB
<LLOY.L>, Royal Bank of Scotland <RBS.L> and Standard Chartered
<STAN.L> were up 3.2 to 8.3 percent.
"The consensus position is to long energy and short
financials ... Financials have seen such a massive de-rating. If
we start to see the oil price comes off, the temptation to
switch those two becomes much greater," said UBS strategist
Gareth Evans.
The Bank of England's minutes of the July 9-10 policy
meeting showed one policymaker wanted to raise interest rates
another wanted a cut, but the remaining seven chose to keep them
steady as both the inflation and economic growth outlook had
deteriorated.
FRIENDS IN DEMAND
Friends Provident <FP.L> climbed nearly 10 percent after
Goldman Sachs said it had listed the insurer as a "conviction
buy" from "not rated".
The broker also initiated Standard Life <SL.L> as a
"conviction buy". The stock was up 3.7 percent.
BHP Billiton <BLT.L> put on 0.9 percent. The miner reported
strong quarterly production gains led by copper and iron ore,
but warned of a looming decline from the world's biggest copper
mine. []
The rest of the mining sector was mixed, with Rio Tinto
<RIO.L>, Xstrata <XTA.L> and Vedanta Resources <VED.L> up. But
Anglo American <AAL.L>, Lonmin <LMI.L>, Eurasian Natural
Resources <ENRC.L> and Ferrexpo <FXPO.L> were down.
"From an economic prospective, a fall in oil prices is a
helpful development ... (But) keeping things in perspective, a
fall in the oil prices is still relatively modest in the context
of the absolute level," said Darren Winder, equity strategist at
Cazenove.
"We will need to see a significant further decline in oil
prices from here before we start contemplating a much more
favourable economic outlook than we have started to discount."
Centrica <CNA.L> added 2.1 percent after the British energy
company said it was to double its stake in Belgian generation
and supply company SPE SA to 51 percent for 515 million euros
($820 million).
Housebuilders, which have been battered on concerns about
falling property prices, weaker economic outlook and the
possibility of higher interest rates, also bounced, with Taylor
Wimpey <TW.L> up 12 percent and Barratt Developments <BDEV.L>
gaining 14.6 percent.
(Additional reporting by Atul Prakash; Editing by David Cowell)
