* FTSE gains 0.8 percent
* Miner rally on tax hopes, BHP faces competition for Potash
* Financials higher, HSBC in talks with OML over Nedbank
By David Brett
LONDON, Aug 23 (Reuters) - Britain's top share index rose by
midday on Monday, led by miners which were boosted by hopes that
a punitive mining tax might be scrapped, and supported by
financials on M&A activity.
By 1055 GMT, the FTSE 100 <> was up 43.83 points, or
0.8 percent, at 5,239.11, after three consecutive sessions of
losses, and having ended 0.3 percent lower at 5,195.28 on
Friday, its lowest close since July 20.
Miners gained as investors speculated that inconclusive
weekend elections in Australia would deliver a change of
government, ushering in a new minority conservative rule that
would scrap a planned mining tax. []
Rio Tinto <RIO.L> and BHP Billiton added 1.9 and 2 percent
respectively.
BHP Billiton, however, faces a battle for the takeover of
Potash Corp <POT.TO>.
Potash's board urged shareholders to reject BHP Billiton's
<BHP.AX> <BLT.L> hostile $39 billion offer and said it was in
talks with a number of potential suitors for a superior deal.
[]
"Traders are going to want to see some legs behind some of
the bid talk stories or they could be forced into cashing in
their gains early," Joshua Raymond, market strategist at City
Index counselled.
Energy shares reversed early losses as risk appetite
returned among investors.
BG Group <BG.L>, which rose 6 percent on Friday on M&A
speculation, added 0.3 percent, while Royal Dutch Shell
<RDSa.L>, mentioned as a potential suitor, gained 0.1 percent.
Cairn Energy <CNE.L> climbed 2.6 percent after it said it
had informed India's Directorate General of Hydrocarbons of a
discovery of oil and gas in an onshore block in the Krishna
Godavari basin. []
Vedanta Resources' <VED.L> proposed acquisition of a
majority stake in Cairn India <CAIL.BO> came under threat from
India's petroleum ministry, which wants state-owned Oil and
Natural Gas Corp <ONGC.BO> to be given a chance to buy the
holding, the Mint newspaper reported on Monday. []
Oil and gas services company Petrofac <PFC.L> gained 2
percent after it forecast a 20 percent rise in net profit for
the full year as its backlog of contracts continued to grow and
it won its first contract in Iraq. []
FINANCIALS GAIN
Banks were higher with HSBC <HSBA.L> up 0.8 percent on
reports it will buy up to 70 percent of South Africa's Nedbank
<NEDJ.J>, in a potential $6.8 billion deal that would give
Europe's largest lender a gateway to the fast-growing African
continent. []
British insurer Old Mutual <OML.L> <OMLJ.J>, which owns a
controlling stake in Nedbank, was the top FTSE 100 riser up 4.6
percent.
The insurance sector, which has been awash with M&A
speculation over recent months, provided strong support for the
FTSE.
Legal and General <LGEN.L> and Aviva <AV.L>, both subject of
recent bid talk, gained 1.8 and 3.2 percent respectively.
Pharmaceutical giant GlaxoSmithKline (GSK) <GSK.L> climbed
1.5 percent as it started final trials of its new vaccine to
prevent shingles. []
Africa's biggest generic drugmaker Aspen Pharmacare
<APNJ.J>, which is 19 percent owned by GSK, said full-year
headline earnings per share likely rose by 25 percent boosted by
its South African operations. []
The world's largest builders merchant distributor Wolseley
<WOS.L> gained 3.5 percent as Numis upgraded its rating on the
firm to "buy" from "add", saying the recent reaction to
disappointing macro data had been overdone.
(Editing by Jon Loades-Carter)
