* Miners up; industrial metals see demand
* Banks rally; Goldman upgrade lifts HSBC
* Oils firmer; crude rallies as U.S. dollar eases
* UK inflation steady at 1.8 pct
By Jon Hopkins
LONDON, Aug 18 (Reuters) - Britain's top share index rose
0.8 percent by mid-session on Tuesday, with banks, miners and
oils leading the way, reversing some of the losses sustained in
the previous session.
By 1100 GMT, the FTSE 100 <> index was 37.12 points
higher at 4,682.13, having dropped 1.4 percent on Monday - its
biggest one-day percentage loss since July 2.
Miners rebounded alongside rallying industrial metals as
investors bet on renewed demand following Monday's retraction.
"It looks like this (recent) sell-off has so far been viewed
as an opportunity to buy into stocks such as Xstrata and Rio
Tinto," said Anthony Grech, market strategist at IG Index.
"It would appear that some people still have the view that
there are even more gains to come from the (mining) sector."
Xstrata <XTA.L> gained 5.5 percent, topping the risers
chart, while Kazakhmys <KAZ.L> added 3.7 percent, with Eurasian
Natural Resources <ENRC.L>, Rio Tinto <RIO.L> and Fresnillo
<FRES.L> rising between 1 percent and 3.6 percent.
Rio Tinto found favour after the company agreed to sell its
Alcan packaging unit for about $2 billion to Australia's Amcor
<AMC.AX>, easing its debt burden. []
On the economic front, British consumer price inflation held
steady at up 1.8 percent year-on-year, surprising analysts who
were expecting a fall back to 1.5 percent. []
Banks pared some recent losses. HSBC <HSBA.L> climbed 2.5
percent buoyed by Goldman Sachs upping its rating for the global
player to 'buy' from 'neutral' with an increased target price of
820 pence.
Goldman Sachs also provided a spur for Standard Chartered
<STAN.L>, which was 1.7 percent higher, as the broker raised its
target price.
Lloyds Banking Group <LLOY.L> and Royal Bank of Scotland
<RBS.L> put on 0.9 and 1.9 percent, respectively.
Royal Bank of Scotland <RBS.L> is believed to be looking at
following Barclays <BARC.L> and Lloyds Banking Group <LLOY.L>
and selling part of its asset management arm, the Daily Express
reported.
Life insurers resumed their recent good run, fuelled by
recent results in the sector and speculative interest.
Friends Provident <FP.L>, which is the subject of a bid from
Resolution <RSL.L> and Prudential <PRU.L>, which recently raised
its dividend, were up 1.2 and 1 percent, respectively.
Legal and General <LGEN.L> gained 2.9 percent and Aviva
<AV.L> added 1.2 percent.
Oils firmed as crude price <CLc1> headed towards $68 dollar
a barrel, with Royal Dutch Shell <RDSa.L>, BP <BP.L>, BG Group
<BG.L>, Cairn Energy <CNE.L>, and Tullow Oil <TLW.L> up 0.4-2.2
percent.
REAL ESTATES WEIGH
Real estate issues were lower as British Land <BLND.L> fell
2.4 percent after the company rebuffed takeover rumours
following its first-quarter results. []
Other property shares were dragged lower, with Liberty
International <LII.L> and Land Securities <LAND.L> down 1.1 and
2.4 percent, respectively.
Investors banked profits in supermarkets, which rose during
Monday's session on defensive considerations. Wm. Morrison
Supermarkets <MRW.L> and Tesco <TSCO.L> lost 0.5 percent and 0.1
percent, respectively.
Oil services firm Petrofac <PFC.L> fell 1.8 percent after
Morgan Stanley cut its stance to 'equal-weight' from
'overweight', with mid-cap peer Wellstream <WSML.L> down 0.5
percent after a Citigroup downgrade.
Later on Tuesday, investors will focus on the United States,
with housing starts and producer prices data due out at 1230
GMT. []
(Editing by Simon Jessop)
