* FTSE 100 gains 0.7 percent
* Lloyds gains after Blank steps down
* Thomas Cook rises; energy stocks up
By Joanne Frearson
LONDON, May 18 (Reuters) - Britain's top share index was 0.7
percent higher at midday on Monday led by the banking sector as
Lloyds Banking Group <LLOY.L> gained after Victor Blank said he
would step down as chairman, while energy stocks rose with crude
prices.
By 1040 GMT the FTSE 100 <> was up 29.75 points at
4,377.86 points in choppy trade having been down as low as
4,307.72 points earlier.
"The banks have taken the initiative this morning. They have
been sold off over the past two weeks and recovering some of
that ground this morning," said Rob Griffiths, equity strategist
at Cazenove.
"We have just come from the reporting season so it is not
clear what is going to drive the market this week... it will be
interesting to see if we can hang on to the current level or
will give up ground like last week," he said.
Bank stocks added the most points to the index with Lloyds
Banking Group <LLOY.L> up 1.6 percent. Victor Blank is to step
down as chairman of the group in the next year, following
intense criticism of the part-nationalised British bank's
purchase of troubled rival HBOS. []
HSBC <HSBA.L> and Standard Chartered <STAN.L> were up 3.7
percent and 4.3 percent respectively.
Thomas Cook Group <TCG.L> gained 11.4 percent. Debt-burdened
German retailer Arcandor <AROG.DE>, which has a controlling
stake in Thomas Cook, plans to ask the German government for 650
million euros ($885 million) in loan guarantees and a loan from
the German state development bank. []
"The end of last week saw it (Thomas Cook) report revenues
up around 12 percent for the first six months, suggesting it has
weathered the storm much better than many were expecting for the
travel sector," said David Jones, chief market strategist at IG
Index.
"Since November last year, the share price has risen by
around 80 percent and at the moment some traders seem to be
banking on this recovery continuing and eyeing a run back to the
highs for this year, just above 300 pence," he said.
ENERGY STOCKS RISE
Energy stocks rebounded from earlier losses as oil <CLc1>
rose to over $57 a barrel.
Royal Dutch Shell <RDSa.L> recovered from earlier falls to
gain 0.3 percent. The Times said shareholders at the oil giant
have increased the pressure on it to reconsider its pay policy
as a second institutional investor promised to vote against the
directors' remuneration report at tomorrow's annual meeting.
BG Group <BG.L>, Tullow Oil <TLW.L> and BP <BP.L> were 0.4
to 1.6 percent higher.
Cairn Energy <CNE.L>, which has significant exposure in
India was up 3.1 percent, while miner Vedanta Resources <VED.L>
gained 2.4 percent, as the Indian company was bolstered by the
decisive victory for the ruling coalition in that country,
calming fears of political instability.
Otherwise mining stocks took the most points off the index
as copper <MCU3=LX> fell 1.1 percent, with Rio Tinto <RIO.L>
down 4.5 percent.
An executive at the global miner said roughly half of
China's iron ore mines may have shut down since prices for that
commodity dropped, opening the door for other low-cost producers
to supply China with the key mineral for making building
materials. []
Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>, Eurasian Natural Resources Corporation <ENRC.L> and
Xstrata <XTA.L> lost 0.9 to 4.2 percent.
(Editing by Hans Peters)
