* FTSE 100 climbs 1.9 pct
* Energy firms, banks lead gains
* Investor sentiment improves on rate cut anticipation
By Harpreet Bhal
LONDON, Nov 4 (Reuters) - Britain's leading share index
climbed at midday on Tuesday, lifted by energy firms and banks,
as investor sentiment improved on the back of a widely
anticipated interest rate cut by the Bank of England this week.
By 1148 GMT, the benchmark FTSE 100 <> climbed 1.9
percent, or 82.19 points to 4,525.05, after slipping into the
red in early trade. The index recorded its fifth straight day of
gains on Monday, the longest rally since December 2007.
BP <BP.L>, Cairn Energy <CNE.L>, and Royal Dutch Shell
<RDSa.L> advanced between 2.3 and 3.5 percent, as investors
searched for solid yields from oil majors and crude prices
<CLc1> traded near $65 a barrel, traders said.
BG Group <BG.L> added 2.2 percent after the firm reported a
140 percent rise in third-quarter profit, beating analysts
forecasts, but said it may delay a key project in Kazakhstan due
to rising development costs.
Paul Kavanagh, head of market strategy at stockbrokers
Killik said investors were positioning themselves ahead of the
rate cuts despite the bad news about the economy.
"The market is prepared to absorb the bad news and focus on
the good," he said.
The BoE is widely expected to cut rates by 50 basis points
at a meeting on Thursday, to spur economic growth. The Reserve
Bank of Australia cut rates by 75 basis points, following rate
cuts in the United States, Japan and China last week.
Insurers rallied, led by Prudential's <PRU.L> 8.1 percent
gains. Legal & General <LGEN.L> and Aviva <AV.L> added 4.3 and
3.2 percent, respectively.
Barclays <BARC.L>, Lloyds TSB <LLOY.L> and HBOS <HBOS.L>
advanced between 5.2 and 7.7 percent. Royal Bank of Scotland
<RBS.L> plunged 7.1 percent after the bank said it faces more
write-downs of toxic debts this quarter and rising bad debts.
Marks and Spencer <MKS.L> climbed nearly 10 percent, after
the retailer posted a better-than-expected 34 percent drop in
first-half profit in a rising consumer downturn.
SHRINKING CONSTRUCTION SECTOR
A further blow to the health of the British economy came
from PMI data, which showed that the construction sector sank
for the eighth consecutive month in October, its fastest pace
since records began in 1997.
The Chartered Institute of Purchasing and Supply/Markit
construction index fell to 35.1 last month from 38.8 in
September, while housing construction recorded the sharpest
decline.
But housebuilders were in demand, lifted by the rate cuts.
Taylor Wimpey <TW.L> soared 18 percent, while Persimmon
<PSN.L>, Barratt Developments <BDEV.L> and Travis Perkins
<TPK.L> gained by between 3.9 and 10 percent.
(Editing by Victoria Bryan)
