* Rio Tinto rises on hopes for Chinalco deal
* Reckitt Benckiser up after results
* Banks down; investors fear U.S. plan may come up short
* BoE says further easing could include buying gilts
By Dominic Lau
LONDON, Feb 11 (Reuters) - Britain's top share index was
flat at midday on Wednesday as oil producers, miner Rio Tinto
<RIO.L> and Reckitt Benckiser <RB.L> rose, countering concern
the U.S. bank plan may come short of easing a credit crisis.
By 1149 GMT, the FTSE 100 <> was unchanged at 4,215.32,
after trading as low as 4,182.10 to as high as 4,231.17.
Rio Tinto surged 6.3 percent to top the FTSE 100 gainers'
list, while its shares in Australia <RIO.AX> jumped 6.2 percent
on hopes the miner would announce a deal with top shareholder
Chinalco to help slash its $39 billion debt burden, when it
announces results on Thursday.
Randgold Resources <RRS.L> strengthened 4.1 percent after
HSBC upgraded the miner to "overweight" from "neutral".
Reckitt Benckiser <RB.L> rose 4.7 percent after the
household cleaning products group met forecasts with a 19
percent rise in 2008 net profits and set cautious 2009 sales and
profit targets as the slowdown starts to bite.
Oil producers, however, added the most points to the index
as crude prices <CLc1> firmed. BP <BP.L> and Royal Dutch Shell
<RDSa.L> put on 0.8 and 0.6 percent, respectively.
Banks, on the other hand, were the main drag on the index on
investor concern that the $2 trillion revamped bank rescue plan
announced by U.S. Treasury Secretary Timothy Geithner on Tuesday
may not be enough to alleviate the credit market turmoil.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Lloyds
Banking Group <LLOY.L> and HSBC <HSBA.L> were off between 0.6
and 2.9 percent.
"The concern for the UK financials is that there was some
hope that if the so-called "bad bank" in the U.S. was valued and
then implemented, we could see that in the UK. Of course, that
remains to be seen," said Richard Hunter, head of UK equities at
Hargreaves Lansdown.
A price target cut from Deutsche Bank also weighed on
Barclays.
Bank of England Governor Mervyn King said the central bank
would probably have to ease monetary policy further and this
could include buying gilts to boost the money supply.
[]
Sterling fell against the dollar while the short sterling
contract rose after a key BoE report showed inflation receding
sharply below target, opening the way for further monetary
easing.
Unemployment in Britain rose by 146,000 to 1.971 million in
the three months to December, the highest level since 1997 but
short of analyst forecasts it would breach the two million
figure.
Britain's commercial property prices fell 3.5 percent in
January continuing their decline after they fell 26.8 percent in
2008, underlining the stiff headwinds buffeting the UK economy.
Land Securities <LAND.L> and Liberty International <LII.L>
shed 2.1 percent and 1.5 percent, respectively.
GlaxoSmithKline <GSK.L> also fell after going ex-dividend.
(Editing by Simon Jessop)
