* FTSE 100 gains 4.3 percent
* Energy, mining stocks rise on rising commodity prices
* Banks mixed as recapitalisation plans assessed
* HBOS, Lloyds TSB, Royal Bank of Scotland tumble
By Simon Falush
LONDON, Oct 13 (Reuters) - Britain's top share index was up
4.3 percent by midday on Monday, recouping some of last week's
heavy losses as a government deal to pump billions of pounds
into the troubled banking sector lifted market sentiment.
Oil and mining stocks rebounded strongly as commodity prices
recovered and some banking stocks gained but HBOS <HBOS.L>,
Lloyds TSB <LLOY.L>, and Royal Bank of Scotland <RBS.L> tumbled
again as investors fretted that moves by the government to take
stakes in the firms would limit returns.
By 1106 GMT the FTSE 100 <> had gained 168.9 points to
trade at 4,100.9 after falling 8.9 percent on Friday and
haemorrhaging 21 percent last week, its biggest fall since 1987.
The FTSE 350 banks index <.FTNMX8350> was up 3.7 percent
after the British government said it would make capital
investments worth 37 billion pounds ($64 billion) in RBS and a
merged Lloyds TSB <LLOY.L> and HBOS <HBOS.L>.
"Market sentiment is a bit more positive, the government has
grasped the nettle and committed to a rescue plan," said Keith
Bowman, equity strategist at Hargreaves Lansdown.
"There's still a huge amount of nervousness and volatility
around but we do seem to have taken a step in the right
direction with some coordination from governments and some
definite action."
HBOS dropped 26.2 percent and Lloyds TSB lost 9 percent
after the latter said it had renegotiated its agreed takeover of
HBOS, dropping its offer to 0.605 of a Lloyds share for every
HBOS share, down from the 0.833 agreed on Sept. 18.
Royal Bank of Scotland tumbled 21 percent to 57.5 pence. RBS
was trading at around 370 pence in January and peaked at over
600 pence in March last year.
Barclays <BARC.L> gained 6.9 percent after it said it would
boost its capital by more than 6.5 billion pounds but expected
to do so without government help.
"I suspect that Barclays have shown the way by saying that
they can go out to Asian, Middle Eastern investors and some of
their own investors and saying we don't need to take this money
from the government, so its quite a confidence statement," Paul
Kavanagh, head of market strategy at stockbrokers Killik said.
Standard Chartered <STAN.L> gained 10.3 percent after it
said it meets UK capital requirements and was well capitalised
and highly liquid.
FINANCIALS GAIN
Other financial stocks also climbed on the government
measures, with insurers Prudential <PRU.L>, and Standard Life
<SL.L> up 5.2 and 6.8 percent, while interdealer broker ICAP
<IAP.L> was up 11.1 percent.
Energy stocks gained as oil <CLc1> climbed more than $3 a
barrel, recouping some of Friday's 10 percent dive, as
nervousness on the future of the world economy eased somewhat.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L> and
Cairn Energy <CNE.L> advanced between 1.6 and 6.5 percent.
Heavily pressured mining stocks also rallied as metals
surged, with copper <MCU3=LX> gaining over 7 percent and gold
up, also recovering ground after last week's heavy losses.
Anglo American <AAL.L>, Kazakhmys <KAZ.L>, Eurasian Natural
Resources <ENRC.L>, Rio Tinto <RIO.L> and Lonmin <LMI.L>
strengthened between 5.8 and 11.5 percent.
Shares in TUI Travel <TT.L> jumped 18.1 percent after
Frankfurt-listed TUI <TUIGn.DE>, which owns 51 percent of the
company, said it would sell its Hapag-Lloyd unit to German
investors, increasing the prospects of it buying out the British
unit. Click on [].
Retailers were supported on hopes that the bank
recapitalisation moves would prevent a deep recession.
Kingfisher <KGF.L> added 0.7 percent, Marks & Spencer
<MKS.L> put on 4.6 percent, and Next <NXT.L> gained 3.6 percent.
(Editing by Greg Mahlich)
