* FTSE jumps 1.5 percent, extending gains to sixth day
* Banks benefit from U.S. earnings hopes
* Miners rally; Alcoa numbers offset China uncertainties
* Oils up; BP leads on spill containment, asset sale hopes
By Jon Hopkins
LONDON, July 13 (Reuters) - Britain's top share index was up
1.5 percent at midday on Tuesday as banks rose on hopes for
second-quarter earnings, while miners rallied, and oils were led
higher by BP <BP.L> on spill containment and asset sale hopes.
At 1039 GMT, the FTSE 100 <> index was 75.15 points
higher at 5,242.17, having added 0.7 percent on Monday,
extending its gains into a sixth straight session.
"What we have generally seen over the last few days are
traders betting that the U.S. earning season will be a fruitful
one and are therefore cherry-picking stocks that to them may
look cheap," said Giles Watts, head of equities with City Index.
Banks were the best blue chip gainers, with the sector
lifted by hopes for the U.S. earnings season.
Among banks, Barclays was the best sector performer, up 3.3
percent, while Royal Bank of Scotland <RBS.L> and Lloyds Banking
Group <LLOY.L> took on 2.6 and 2.4 percent, respectively.
"We have a number of important banks reporting over the
remainder of the week, including JP Morgan, Citigroup and Bank
of America, and I get the feeling that the buying of the banks
... has been largely with a view to heightened optimism that
these will outperform," said City Index's Watt.
Metals firm Alcoa <AA.N>, the largest U.S. aluminium
producer, lifted its outlook for global consumption of the metal
and posted strong quarterly results after Wall Street's close on
Monday. []
Miners rallied from earlier falls, led by Eurasian Natural
Resources <ENRC.L>, up 3.6 percent, and precious metals group
Johnson Matthey, up 3.6 percent, as investors focused on the
solid earnings from Alcoa and shrugged aside other concerns.
Reports that China will not relax tougher property measures
any time soon had earlier added to worries from recent data
showing the demand outlook from the world's biggest consumer of
metals could be tightening.
BP BUOYANT
Integrated oils were higher led by BP <BP.L> which gained
2.6 percent, having jumped 9 percent on Monday, as a mixture of
asset sale hopes, bid possibilities, and signs the Gulf of
Mexico oil spill, the worst in U.S. history, could be contained
pushed the stock higher.
BP said late on Monday it had installed and was ready to
test a cap that, if successful, would for the first time stop
the oil spewing from its ruptured well on the floor of the Gulf
of Mexico. []
BP also said on Tuesday that talks on divestments were
making progress. []
"BP is bouncing back from a very low base, of course, but
the closer we get to the resolution of the spill, the greater
chance there is we (will) get back to a reasonable valuation,"
said Henk Potts, equity strategist at Barclays Wealth.
Among the other oil blue chips, Royal Dutch Shell <RDSa.L>
gained 0.5 percent, and BG Group <BG.L> added 0.2 percent as the
crude price <CLc1> rallied higher.
Elsewhere with the FTSE 100 risers, food and tobacco issues
were in demand led by Unilever <ULVR.L> and British American
Tobacco <BATS.L>, both up 2.1 percent, as Goldman Sachs upgraded
its ratings for both in a review of the European food and
household products sector.
Among just a handful of blue chip fallers at midday,
satellite broadcaster BSkyB <BSY.L> shed 0.1 percent, while
property groups Capital Shopping Centres <CSCG.L> and British
Land <BLND.L> lost 0.3 and 0.4 percent, respectively.
On the macro front, falling petrol prices pushed British
inflation down for a second month running in June, but
underlying price pressures rose and inflation over the quarter
was higher than the Bank of England's latest forecast.
The Office for National Statistics said annual consumer
price inflation fell to 3.2 percent from May's 3.4 percent after
prices rose 0.1 percent on the month, as economists expected.
[]
(Editing by Sharon Lindores)
