* FTSE 100 rises 0.2 pct
* UK housing market package lifts banks, builders
* Weak crude and metal prices weigh on commodity stocks
* BA, Carnival, tour operators gain on lower crude prices
By Dominic Lau
LONDON, Sept 2 (Reuters) - Britain's leading share index
edged up by midday on Tuesday as a UK government plan to bolster
the slumping housing market lifted banks, though heavyweight
commodity stocks fell on weaker metal and crude prices.
By 1020 GMT, the FTSE 100 <> was up 11.2 points, or 0.2
percent, at 5,614.0, reversing earlier losses but
underperforming other major European indexes because of its
heavy weighting towards commodity stocks.
Banks were the top-weighted gainers on the index, with HBOS
<HBOS.L>, Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>,
HSBC <HSBA.L>, Lloyds TSB <LLOY.L> and Standard Chartered
<STAN.L> rising between 0.5 and 3.8 percent.
Prime Minister Gordon Brown cut an unpopular tax on home
purchases as part of a package to boost the country's slumping
housing market and lift his flagging political fortunes.
[]
Mid-cap housebuilders Persimmon <PSN.L>, Taylor Wimpey
<TW.L>, Barratt Developments <BDEV.L>, Bovis Homes <BVS.L> and
Bellway <BWY.L> surged between 4.7 to 9.8 percent.
FTSE 100-listed building materials distributor Wolseley
<WOS.L>, which also has a large U.S. presence, rose 6.3 percent.
The support on the housing market also aided retailers, with
home-improvement groups Kingfisher <KGF.L> and Home Retail
<HOME.L> both gaining around 4.6 percent.
But some analysts said the housing package was not the main
factor behind a rise in the index.
"The market has been going strong in the last few days. I
don't think as such the package, which is only worth 1 billion
pounds. ... is the heart of the matter," said Edward Menashy,
economist at Charles Stanley.
"The heart of the matter is that the pound is going down.
That does mean for a lot of the overseas earners, particularly
the dollar earners, and will translate into higher sterling
profit."
Menashy also said the fall in oil prices helped ease the
strain on companies and household spending.
Sterling hit a 2-1/2-year low against a resurgent dollar, as
the beleaguered UK currency's battering continued amid a view of
a UK economy on the brink of recession.
WEAKER CRUDE
With crude prices <CLc1> trading below $107 a barrel,
British Airways <BAY.L>, cruise operator Carnival <CCL.L> and
tour operators Thomas Cook <TCG.L> and TUI Travel <TT.L> put on
4.4 to 6.6 percent. Mid-cap easyJet <EZY.L> leapt 8.8 percent.
Energy stocks, however, suffered. BP <BP.L>, Royal Dutch
Shell <RDSa.L>, gas producer BG Group <BG.L>, Tullow Oil <TLW.L>
and Cairn Energy <CNE.L> lost between 1.8 and 4.4 percent.
Weaker metal prices also weighed on mining stocks, with BHP
Billiton <BLT.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L>, Anglo
American <AAL.L>, Antofagasta <ANTO.L>, Vedanta Resources
<VED.L> and Eurasian Natural Resources <ENRC.L> down 2.4 to 4
percent.
Lonmin <LMI.L> added 0.2 percent after the world's third
biggest platinum producer again rejected Xstrata's hostile $10
billion takeover bid as undervaluing the firm and said it was
exploring options. []
Investors will likely keep an eye on the U.S. ISM survey due
at 1400 GMT for further clues on the state of the world's
largest economy. The U.S. markets will resume trading later
after Monday's Labor Day holiday.
Pubs group Greene King <GNK.L> said it would meet its
expectations for the current financial year, despite tough
trading and a lacklustre outlook for the UK economy. The mid-cap
firm was up 6 percent.
Within the pub sector, Enterprise Inns <ETI.L>, Whitbread
<WTB.L>, Punch Taverns <PUB.L> and Mitchells & Butlers <MAB.L>
climbed between 3.5 and 7.7 percent.
(Editing by Quentin Bryar)
