* FTSE 100 closes up 0.9 pct; Arm jumps on bid talk
* Miners rally, lifted by Australian tax report, banks gain
* BP down on dividend, litigation worries
By Simon Falush
LONDON, June 10 (Reuters) - A rally by miners lifted
Britain's top share index by the close on Thursday, while
improved economic sentiment gave banks a boost.
Another sharp fall for BP <BP.L>, however, limited the
index's gains, as the costs of the disastrous oil spill in the
Gulf of Mexico continued to cloud the company's future.
Miners delivered the bulk of the rally, extending gains
after the Herald Sun newspaper said the Australian government
would soon announce major changes to a controversial mining tax
that has weighed on the sector. []
Rio Tinto <RIO.L>, Xstrata <XTA.L>, Kazakhmys <KAZ.L> and
Eurasian Natural Resources <ENRC.L> added 3.4 to 4.5 percent.
Miners were also supported by positive economic data from
China, where robust growth in May exports and imports testified
to the underlying momentum of the world's third-largest economy.
The FTSE 100 <> ended up 46.64 points, or 0.9 percent,
at 5,132.50, having broken a three-day losing streak on
Wednesday.
However, investors were still cautious, with the blue-chip
index nursing 11.9 percent losses since Europe's debt crisis
escalated in mid April.
"There are any number of problems that could reappear, and
credit markets are still not running smoothly," said Tim
Whitehead, investment manager at Redmayne-Bentley in Leeds.
"It will be hard to make much headway above 5,200 over the
summer, and I wouldn't be surprised if we test 5,000 again.
BANKS BOUGHT
But there was enough optimism to lift cyclical stocks such
as banks. Barclays <BARC.L>, HSBC <HSBA.L>, Lloyds Banking Group
<LLOY.L>, Royal Bank of Scotland <RBS.L> and Standard Chartered
<STAN.L> were up 0.5 to 4.6 percent.
The Bank of England left rates on hold at a record low of
0.5 percent and kept quantitative easing at 200 billion pounds,
while the European Central Bank left rates at 1 percent, also an
all-time low.
ARM Holdings <ARM.L> was the top gainer, up 5.9 percent,
with traders citing the reappearance of rumours of bid interest
from Apple <AAPL.O>, though a spokeswoman for ARM said it had
received no approach and a takeover from Apple made no sense.
Oil major BP lost 6.7 percent, with investors anxious over
the company's ability to pay its dividend and the costs BP will
have to assume to deal with liabilities related to the spill.
BP has shed as much as 45 percent of its value since the oil
began to leak on April 21, hitting its lowest level in more than
13 years.
The fall in its value has pulled its FTSE 100 ranking down
to fourth in terms of market capitalisation, overtaken by
Vodafone <VOD.L>, according to Thomson Reuters Datastream.
Britain's No.1 household goods retailer Home Retail Group
<HOME.L> dropped 4.1 percent, the second-biggest FTSE 100
faller, after it posted a bigger-than-expected decline in
first-quarter sales.
(Additional reporting by Dominic Lau, editing by Will Waterman)
