* FTSE 100 gains 0.64 pct
* Miners rally as gold advances; M&A in focus
* Barratt Developments soars 25 pct, Polaris raises stake
By Patrizia Kokot
LONDON, Aug 11 (Reuters) - Britain's leading share index
rose in midday trade on Monday, driven higher by miners and
heavyweight oil stocks as commodity prices rebounded.
Housebuilders grabbed the spotlight after traders said
Polaris Capital Management raised its stake in Barratt
Developments <BDEV.L>, which jumped more than 25 percent.
Barratt Developments said in a statement Polaris had reached
a threshold of a 6 percent stake and declined to comment
further.
By 1044 GMT, the FTSE 100 <> was up 35.4 points, or
0.64 percent, at 5,524.1 points, adding to a 2.5 percent gain in
the previous week.
Oil heavyweights BP <BP.L> and Royal Dutch Shell <RDSa.L>
rose 1.4 and 1.8 percent respectively on the back of a modest
recovery in crude prices <CLc1> as fighting between Russia and
Georgia disrupted some exports from the Caspian region.
The release of UK producer price inflation data for July
also gave some support. Official data showed that British
manufacturers' costs unexpectedly fell at their sharpest pace in
1-1/2 years in July.
An advance in gold <XAU=> spurred on the mining sector,
which added 10 points to the index.
Eurasian Natural Resources Corp <ENRC.L> fell 6.2 percent
after copper producer Kazakhmys <KAZ.L> said it increased its
stake in the group to a blocking majority of 25 percent but it
had no intention to bid for now. Kazakhmys gained 1.7 percent.
Xstrata <XTA.L> added 1.5 percent after the Sunday Telegraph
said the miner was planning to raise more than 5 billion pounds
to forge ahead with its $10 billion hostile takeover bid
for South African platinum producer Lonmin <LMI.L>.
The bidding price of 3,300 pence a share was however below
the Lonmin share price, which was around 3,400 pence. Lonmin was
down 0.5 percent.
Smaller FTSE 250-listed peer Aquarius Platinum <AQP.L>
rallied 5 percent after UBS raised its stance on the group to
"buy" from "neutral".
In a note to clients, the broker said the "platinum
supply-demand fundamentals are amongst the best in the mining
industry" and also said that the premium Xstrata is willing to
pay for Lonmin suggests confidence in sustained high
platinum group metal prices.
Homebuilders were among some of the major gainers on the UK
stock market. Aside from the rally in Barratt Developments,
analysts also pointed to short-covering ahead of the usual
summer lull, as well as hopes for the temporary suspension of
stamp duty for first time buyers.
"It's a combination of things," said Chris Millington, an
analyst at Numis Securities. "People are closing their short
positions before they go on holiday and Libor has suffered a
little recently. Similarly oil prices are easing (from their
peaks)," he added.
Target price raises by Goldman Sachs across the sector also
lifted stocks and Taylor Wimpey <TW.L> gained 8.3 percent and
Persimmon <PSN.L> advanced 6.4 percent.
Bovis <BVS.L> added 3.5 percent after Goldman Sachs removed
the stock from its "conviction sell list".
Wolseley added 7.4 percent on rumours about the potential
sale of its U.S. unit.
The battle over a 35 percent stake in British Energy <BGY.L>
continued after Centrica <CNA.L> said it might revive plans to
merge with the company after French group EDF's <EDF.PA> 12
billion pound ($23.6 billion) bid for the nuclear power firm
stalled.
British Energy rose 0.4 percent and Centrica advanced
0.3 percent.
(Editing by Paul Bolding)
