* FTSE gains 0.2 pct by midday
* Banks rise after UK data
* Miners rally with metal price
By David Brett
LONDON, Aug 19 (Reuters) - Britain's top share index rose by
midday on Thursday as banks rallied after UK public sector net
borrowing came in lower than expected and mining stocks showed
strength.
By 1028 GMT, the FTSE 100 <> was up 8.97 points, or 0.2
percent, at 5,311.84, albeit with the index trading at just 22
percent of its average 90-day volume.
London's blue chips ended down 0.9 percent on Wednesday at
5,302.87.
Public borrowing was lower than a year ago but still
revealed the uphill task the government has to face to bring
down a 2009/10 record budget deficit.
"A slightly brighter picture in terms of the economic data
today," Henk Potts, equity strategist at Barclays Wealth, said.
"(The report) was certainly better than the market was
anticipating and suggesting that they could be on target to meet
those commitments they've made in terms of public borrowing
expectations for this year," Potts added.
Banks reversed earlier losses with Barclays <BARC.L> and
Standard Chartered <STAN.L> each up 0.9 percent.
British retail sales volumes rose nearly three times faster
than economists had forecast in July, with almost all non-food
sectors showing strong growth, the Office for National
Statistics said. []
Across the Atlantic, weekly U.S. jobs data are due at 1230
GMT while the Philadelphia Federal Reserve Bank will release its
business activity index at 1400 GMT.
MINER RALLY
Mining stocks gained along with firmer metal prices,
rebounding from Wednesday's fall. African Barrick Gold <ABGL.L>
and Randgold Resources <RRS.L> added 0.2 and 0.6 percent as the
precious metal continued to hover near recent high with
investors exploiting its safe-haven qualities.
BHP Billiton <BLT.L> added 0.5 percent.
The miner is focusing on getting regulatory approval for its
$39 billion hostile bid for Potash Corp <POT.TO> before trying
in earnest to win over the Canadian company's shareholders, a
source said on Thursday. []
The market, however, lacked real direction.
Chipmaker Arm <ARM.L>, outsourcer Serco <SRP.L> and
temporary power provider Aggreko <AGGK.L> were among the top
risers, up between 2.5 and 3.6 percent.
Some perceived defensive stocks weighed on the downside,
with United Utilities <UU.L> off 1.7 percent as JPMorgan
Cazenove cut its rating to "neutral" from "overweight".
Drugmaker GlaxoSmithKline <GSK.L> shed 0.7 percent, while
British American Tobacco <BATS.L> dropped 0.6 percent.
Essar Energy <ESSR.L> slipped 0.4 percent after it said net
first-half profit fell 28 percent due to lower non-cash gains
related to the rising values of fuel inventories and losses from
retailing fuel. []
Inmarsat <ISA.L> was down 2.1 percent after UBS downgraded
its rating on the British satellite firm to "neutral" from "buy"
on valuation grounds.
(Editing by Michael Shields)
