* Miners, banks rise on economic recovery hopes
* Oil companies, defensives softer
* Shell <RDSa.L> announces restructuring plans
By Catherine Bosley
LONDON, May 27 (Reuters) - Britain's top share index ticked
up 0.1 percent around mid-session on Wednesday, lifted by shares
in banks and miners on growing optimism that an economic
recovery may be underway, though lower oil and pharma stocks
capped gains.
At 1033 GMT the FTSE 100 <> index was up 3.99 points at
4,415.71, having ended 1.1 percent higher on Tuesday.
"We're just getting some good follow through from the U.S.
and Asia," said Mike Lenhoff, chief strategist at Brewin Dolphin
Securities in London.
"The markets are now catching on to the idea that there's a
recovery out there and every little bit of positive news flow
that supports that view is what the markets respond to."
Banks were boosted by Tuesday's strong rally on Wall Street
<> after the biggest monthly jump in U.S. consumer
confidence in six years raised hopes of an economic rebound.
Barclays <BARC.L>, HSBC <HSBA.L>, Standard Chartered
<STAN.L> and Royal Bank of Scotland <RBS.L> added between 0.3
and 2.6 percent. Bucking the trend, Lloyds Bank Group <LLOY.L>
fell 0.2 percent.
Other financial stocks also saw good demand, with hedge fund
manager Man Group <EMG.L> up 3 percent and insurer Aviva <AV.L>
up 2.6 percent.
Heavyweight miners also lent the FTSE 100 their strength as
metal prices recovered. BHP Billiton <BLT.L>, Anglo American
<AAL.L>, Antofagasta <ANTO.L> and Kazakhmys <KAZ.L> gained
between 0.3 and 2.5 percent.
Investors are also eyeing U.S. existing home sales data
<USEHSP=ECI>, due at 1400 GMT, for any signs of life in moribund
housing market.
OILS WEAK
Oil majors were a drag on the index, even as crude prices
<CLc1> topped $63 per barrel, their highest since November,
ahead of Thursday's meeting of the Organization of the Petroleum
Exporting Countries in Vienna.
The global economy has strengthened enough to cope with oil
at $75-$80 a barrel and that level will be hit soon as fuel
demand picks up, Saudi Oil Minister Ali al-Naimi said on
Wednesday. []
Royal Dutch Shell <RDSa.L> dropped 1.2 percent, BP <BP.L>
lost 0.6 percent and BG Group <BG.L> shed 0.9 percent.
Shell said it planned to restructure operations to cut
costs, dividing its core exploration and production (E&P)
business into a North and South American unit and a non-American
one [].
Explorer Tullow Oil <TLW.L> was 0.6 percent lower, recouping
some earlier losses, on news an exploration well in Uganda was
plugged and abandoned [].
As some risk appetite returned, defensive stocks also fared
poorly, with British American Tobacco <BATS.L> losing 1.7
percent and drug makers AstraZeneca <AZN.L> and GlaxoSmithKline
<GSK.L> down 2 percent and 0.8 percent respectively.
"The sectors of the market that respond to the improvement
in the news are your cyclical sectors because their earnings are
geared to the upswing," Brewin's Lenhoff said.
Marks & Spencer <MKS.L>, Cobham <COB.L> and Next <NXT.L>
fell after trading ex-dividend on Wednesday.
On the economic front, the pace of decline in Britain's
services sector looks set to slow over the next three months
helped by falling costs, a survey by the Confederation of
British Industry showed. []
(Editing by David Cowell)
