* Oils top-weighted gainers
* Drugmakers in demand
* Financial issues shunned
By Dominic Lau
LONDON, Dec 30 (Reuters) - Britain's FTSE 100 <> index
rose 0.6 percent by midday on Tuesday, the last full session of
2008, led by heavyweight energy and mining stocks.
Oil producers were the top-weighted gainers, as crude prices
held steady below the $40 a barrel level. BP <BP.L>, Royal Dutch
Shell <RDSa.L> and BG Group <BG.L> were up 1.4 to 1.9 percent.
By 1123 GMT, the FTSE 100 was up 25.91 points at 4,345.26,
building on the previous session's 2.4 percent rise. However,
activity was expected to be light.
The index is set to record its worst annual performance in
its history, when the markets close at 1230 GMT on Wednesday.
"Commodities and resources have had a seesaw year in 2008,
but I still like that sector overall, particularly with oil in
the $30 range," said Martin Slaney, head of derivatives at GFT
Global Markets. "I like gold ... as a long-term investment."
"But overall it is still pretty much on the back foot ...
It's difficult to find much reason for buying into the market
even at these levels."
Slaney said the FTSE 100 could dip below 4,000 again and did
not expect the market to rally more than 10 to 15 percent from
where it is and would struggle to break the 5,000 level.
Miners also rose, with BHP Billiton <BLT.L> up 2.7 percent,
Kazakhmys <KAZ.L> rising 2.6 percent and Eurasian Natural
Resources <ENRC.L> gaining 5 percent.
Defensive pharmaceutical stocks gained, with many analysts
expecting the first-half of 2009 would remain tough for equity
performance. The DJ European healthcare index <.SXDP> has fallen
more than 19 percent so far this year, the best performer among
the DJ Stoxx 600 sectors <>.
GlaxoSmithKline <GSK.L>, AstraZeneca <AZN.L> and Shire
<SHP.L> advanced between 0.5 and 0.8 percent.
Engine maker Rolls-Royce <RR.L> added 1.2 percent after it
said it has won a compressor contract for a new Russian-European
gas pipeline from a Gazprom subsidiary. Rolls-Royce was also
given a $221.7 million engine contract from the U.S. Navy.
CURRENCY POUNDED
The pound hit a record trade-weighted low as worries about a
deteriorating UK economy pushed the currency to a 6-1/2 year low
against the dollar and close to a record trough versus the euro.
Financial issues were a big drag on blue-chip sentiment as
investors shunned the sector after a dismal 2008, notably for
the banks in the eye of the financial storm.
HBOS <HBOS.L> was a big blue-chip faller, down 2.7 percent.
The Financial Times said HBOS's pension scheme trustees may ask
a judge to postpone Lloyds TSB's <LLOY.L> proposed takeover of
the lender until "appropriate arrangements" have been made to
guarantee the merged business will stand behind the fund.
HBOS said the merger with Lloyds, whose shares were down 2.9
percent, offered the best form of protection for its employees.
Barclays <BARC.L> lost 0.7 percent and Royal Bank of
Scotland <RBS.L> slipped 0.6 percent.
Selected insurers were shunned as capital raising worries
continued to dog the sector, with Prudential <PRU.L>, Aviva
<AV.L> and Standard Life <SL.L> down 0.9-2.6 percent.
(Additional reporting by Jon Hopkins; Editing by Rupert
Winchester)
