* FTSE up 0.3 percent
* Banks and energy share higher on technical grounds
* Miners lower as dollar picks up, Rio, BHP JV off
By David Brett
LONDON, Oct 18 (Reuters) - Britain's top shares rose
slightly by midday on Monday with strength in oils and banks
outpacing weakness in miners dragged lower by a resurgent dollar
and after their recent outperformance.
By 1042 GMT, the FTSE 100 <> was up 13.80 points, or
0.23 percent, at 5,716.95, bouncing off a session low of
5,670.07. The index closed down over the two previous days.
"Investors have understood that the worst case scenario is
no longer the most likely," Societe Generale analysts said in a
note, referring to the risk of recession in the United States
and deflation in Europe having been all but ruled out.
"Blue chip companies are flourishing and earnings outlook
remains positive. All of these factors should give heart to
investors and incite them to move progressively back towards
equities."
Energy shares and banks were the standout performers as
investors looked to pick up stock on the cheap.
Oil majors BP <BP.L> and BG Group <BG.L> were up 0.4 and 1.3
percent respectively, while state-backed lender Lloyds Banking
Group <LLOY.L> rose 2.2 percent, with traders citing technical
factors.
The world's largest listed hedge fund Man Group <EMG.L>,
which has been firmer on bid speculation recently, added 2.3
percent with traders saying despite their recent rally they are
still seeing further upside for the stock.
Mid cap firm BlueBay Asset Management <BBAY.L> leapt almost
30 percent as Royal Bank of Canada <RY.TO> pounced to buy the
fund manager for around 963 million pounds ($1.5 billion).
[]
Compared with the miners which have risen almost 30 percent
since their recent low on Aug. 25, energy and financial assets
have climbed just 14.7 and 6.5 percent respectively.
MINER BLIP
Miners extended Friday's falls in tandem with metal prices,
which fell across the board as the battered dollar rose on
Monday to edge further away from a 10-month low set on Friday.
"The fall in the dollar recently has led to a rise in
commodity prices, and that has been good for the miners so (with
the dollar rebounding) there is a bit of weakness there," said
Richard Hunter, head of UK equities at Hargreaves Lansdown.
Sector sentiment was also soured as BHP Billiton <BLT.L> and
Rio Tinto <RIO.L>, down 1.5 and 1.2 percent respectively,
announced the cancellation of their proposed iron ore joint
venture as expected, caving in to opposition from regulators,
steelmakers and major investors 16 months after unveiling the
plan. []
Retailers were weak as investors awaited the British
government's Comprehensive Spending Review on Wednesday, which
is expected to involve a swathe of cuts to the public sector
that could hit consumer spending hard, traders said.
Tesco <TSCO.L> was off 0.6 percent and Home Retail <HOME.L>,
the owner of Argos which reports results on Wednesday, was down
0.9 percent.
U.S. stock index futures pointed to a lower open on Wall
Street with September U.S. industrial production figures due at
1315 GMT, and corporate results from companies including
Citigroup <C.N>, due at 1200 GMT, and Apple <AAPL.O>, set to
report after Wall Street's close.
(Editing by David Cowell)
